The KT&G saga is the first public battle in Asia waged by the activist hedge funds. In the US hedge funds have faced diminishing returns from their traditional arbitrage-focused activities and have begun to flex their financial muscle by taking strategic investment stakes in major corporates.
“The $1.2 trillion hedge fund industry is taking up the corporate raider mantle to boost returns after the average fund gained just 9.2% in 2005,” Bloomberg News reported in May, noting that the level of returns was well below the annual average of 16% in the 1990s.
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