Skip to main content
corporate governance

George Armoyan, CEO of Clarke Inc.Peter Power/The Globe and Mail

So we're all probably by now familiar with the stereotype of the loud-mouthed, brash, arrogant, activist investor. They're camera-ready, often American hedge fund managers, who will think nothing of engaging in shouting matches on national television – sometimes with each other. We're not devoid of these kinds of larger-than-life activist characters in Canada either; to wit, long-time dissident investor George Armoyan, executive chairman of Clarke Inc., has never been accused of being a shrinking violet.

But perhaps what you didn't know is that there are a handful of activists that are quietly working behind the scenes right here in Canada. These individuals don't work for activist investment firms. Nor do they spend all day engaging in activist investing. They might not necessarily even agree with the term "activist investor." But make no mistake, these individuals absolutely do, on occasion, in an opportunistic fashion, engage in activist investing. "They" are a select few Canadian fund managers.

Stephen Griggs, chief executive officer of Smoothwater Capital, a Toronto-based activist investment company, says Canadian small-cap managers in particular occasionally "push their weight around" as shareholders and perform some of the acts that a classic Bill Ackman-style hedge fund does. Mr. Griggs points out that a small-cap manager could easily hold 10 to 15 per cent of a company's shares, and in the absence of large institutional shareholders, hold a lot of clout. "Small-cap managers will not hesitate to pick up the phone and call the chairman or CEO" to propose a change of strategy, initiate a buyback, or do an acquisition, says Mr. Griggs.

It might not be American-style activist investing, but it's still agitating for change.

Dan Hallett, principal with HighView Financial Group says "Irwin Michael [ABC Funds], Ian Hardacre [Invesco Trimark Ltd.] and Dina DeGeer [Bluewater Investment Management Inc.] are examples of domestic fund managers who have undertaken activist-like stances – sometimes very behind the scenes and sometimes more publicly. But they have taken the activist role in a very select number of instances as part of their broader portfolios when they saw it necessary to take such actions."

In an interview, Mr. Michael, portfolio manager with ABC Funds, says that on occasion he "provides input to management" and admits that most of his company's interventions are very much "behind the scenes." The only public activist investment engagement Mr. Michael was part of was in 2012 when he was part of a group of investors who were pushing for change at Rona Inc.

Ms. DeGeer, fund manager with Bluewater Investment said, via e-mail, "There is only one situation where I would say I was an activist and it was behind closed doors."

The fund managers that are doing the agitating in Canada are often small- and mid-cap managers for one simple reason: That's the kind of companies activists are targeting in Canada. According to Activism Insight, 57 per cent of activist-targeted Canadian companies in 2014 have market capitalizations in the $250-million to $2-billion range.

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 26/03/24 0:51pm EDT.

SymbolName% changeLast
CKI-T
Clarke Inc
+0.73%19.45

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe