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Across corporate America, activist investors are flexing their muscles, said Alexandra Stevenson at The New York Times. These billionaire hedge funders, "once called corporate raiders" and immortalized in films like Wall Street, are increasingly buying up small chunks of public companies and then agitating for changes they think will return more value for shareholders. Activist hedge funds now manage more than $129 billion in assets, compared with just $29 billion 10 years ago, and this year, they've targeted companies as diverse as snack giant Mondelez, eBay, and American Express. Management shake-ups, ruthless cost-cutting, spin-offs, and expensive share buybacks are all part of their playbook. Their investments are getting bigger as well. William Ackman's $1 billion bet against Herbalife in 2013 was then striking for its size. Now, "staking billion-dollar bets is quickly becoming the norm." Just this month, Nelson Peltz's firm, Trian Fund Management, invested $2.5 billion in General Electric, one of the biggest activist investments ever.

"Are activist shareholders good or bad for business?" asked David Benoit and Vipal Monga at The Wall Street Journal. Well, it depends. We examined 71 activist campaigns against companies worth $5 billion or more going back to 2009, when activism really took off. The result: "Activism often improves a company's operational results — and nearly as often doesn't." Slightly more than half the companies studied had better shareholder returns than their industry peers did after an activist challenge. But even then, those companies beat peers by less than 5 percentage points. Critics say activists encourage short-term thinking and scare CEOs out of making tough decisions, while others contend activists are a "much-needed check on corporate leaders." The evidence suggests it's really "case by case."

"Some investors worry that companies are bowing to activists' demands too easily," said Michael Flaherty and Anjali Athavaley at Reuters. Concerned about long, drawn-out battles for control, management teams are cutting deals with activists "at the fastest pace since the financial crisis." In proxy fights over board seats, activists' success rate rose to 73.1 percent last year, compared with less than 50 percent in 2012. When chemical conglomerate DuPont won a blistering fight over board seats with Peltz's Trian in May, it was widely seen as a triumph for CEO Ellen Kullman. Since then, however, DuPont has seen its stock drop more than 30 percent, and Kullman abruptly resigned this month.

The real losers may be the workers at firms targeted by activists, said Walter Frick at Harvard Business Review. When academics at Duke, Columbia, and Cornell universities studied manufacturing plants owned by companies where activist hedge funds took a stake, they found the plants were indeed more productive after activists pushed for changes. Wages, however, stayed flat. It's a trend that's playing out in the broader economy. Income used to rise "in lock step with productivity," but the link began to break down in the 1970s. The rise of activist investing alone can't explain the increase in income inequality, but the study is a "microcosm" of the growing gap between productivity and wages. If activists are creating value, they're also capturing a lot of it for themselves.