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A change in the way activist and private equity investors are viewed is underway, Corvex Management founder Keith Meister said Tuesday. Meister said in an interview that “the lines are blurring” between the two groups and predicted the future could see a more streamlined approach. “When we think about this in a decade, [it] will be, it’s not corporate raiders taking over a business, it’s not activists going in to kick out a bad CEO, it’s a public market investor lending a skillset of acting like a business owner when they buy stocks to make them more valuable, and I think that will become a bigger asset class over time,” Meister told CNBC’s David Faber in a special interview for CNBC Pro from the sidelines of the 13D Monitor Active-Passive Investor Summit. Corporate raider is a term used to refer to aggressive activist investors. “The reason it hasn’t happen more quickly is because the amazing large private equity funds have been victims of their own successes,” Meister said. Activist investors, which include Trian’s Nelson Peltz, can agitate for a wide variety of changes including selling off underperforming or undervalued businesses or replacing management teams. Private equity investors, meanwhile, usually build a controlling stake in a company, with the aim of taking it private and making it more valuable before selling it for a profit. Examples of such investors are Blackstone and KKR. Meister added the shift has already been taking place in the past 20 years and said more traditional private equity investors are already “acting like business owners in the private markets.” Meister hopes the broader implications will push investors “away from the smaller activist ecosystem, and you get public market participants acting like business owners.” MGM hack Meister also said a cyberattack at casino operator MGM Resorts last month doesn’t worry him over the long-term. Meister is a member of MGM’s board of directors. “The stock has gone down about 37% because of this awful event,” Meister said. “I promise you this, the effect this has on our future cash flows is way less than 37%.”
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