Burden of expectation

By any reckoning, activist hedge funds have had a stellar half decade. Within five years, they have transformed themselves from investors on the fringes of the market to driving some of the biggest mergers and acquisitions in the world. They have brought down the careers of powerful executives, while at the same time seeing their own reputations soar. Activists such as Carl Icahn, Nelson Peltz and Bill Ackman – once written off as mere rabble-rousers and agitators – now attract comparisons to the likes of venerated investor Warren Buffett.

As a group, the amount of money they have been entrusted to manage has nearly tripled, from just under $47 billion in 2010 to $130 billion at the end of 2015, according to research ...

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