“The role of the activist in the U.S. equity markets … has been to profoundly improve corporate governance in America,” Citadel hedge fund CEO Griffin said Monday at the Milken Institute Global Conference in Los Angeles.
“We can debate the merits of each run by activists at a given company in a given quarter. Did they make the right call going against this company’s direction, are they pushing the right thing for a company’s use of cash,” he added. “But big picture, corporate governance in the United States is better than pretty much anywhere in the world.”
Griffin said he supports increasing the ability for investors to access the boardroom and giving them and other large shareholders a say in how companies are managed.
“They will govern themselves better at the possibility of a threat,” Griffin said. “That benefits everyone in society.”
Griffin’s Citadel, running about $26 billion, invests in the stocks and bonds of companies but does not traditionally agitate for change like traditional activist investors, who can include both hedge funds and private equity shops that practice leverage buyouts.
Griffin was backed up by Mohamed El-Erian of Allianz, who spoke alongside him onstage.
He said activism was “not positive in every single case” but was a “positive overall.”
Corporate agitators are “an advantage that the U.S. has vis-a-vis the rest of the world,” El-Erian said.