Investor Activism Makes Big Headlines But Where Are The Big Returns?

As I recounted in Part 1 of the 10 part series on equity activists, in 1926 Benjamin Graham accumulated about $130,000 worth of Northern Pipeline’s undervalued stock (about $1.7 million in today’s dollars), and set out to convince management to “do the right and obvious thing” and pay out its horde of cash to shareholders. The “Northern Pipeline Contest” ushered in the age of activist investing.

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Though it took two years, Graham’s activist campaign was a resounding success for shareholders, increasing the value of Northern Pipeline stock, including distributions, by some 70%.

Today, nine decades since the Northern Pipeline Contest, over $176 billion is allocated to dedicated activist strategies, according to...