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Hedge fund activists, or activist investors, often make headlines in the world of business for their begrudged presence in major global corporations. But being an activist is a good thing, right? If you’re the CEO of a large company with a floundering profit margin, you might be weary of these activist investors, who will likely be knocking on your door to encourage making structural changes to your company. However, activist investors often have a decidedly positive impact on the overall health of a business.

Investopedia defines activist investor as “an individual or group that purchases large numbers of a public company’s shares and/or tries to obtain seats on the company’s board with the goal of effecting a major change in the company.” The definition also mentions how “a company can become a target for activist investors if it is mismanaged, has excessive costs, could be run more profitably as a private company, or has another problem that the activist investor believes it can fix to make the company more valuable.” Essentially, activist investors are private equity firms, hedge funds, or wealthy individuals that have the know-how to make major changes to the companies they invest in.

Prominent activist investors include Carl Icahn, who has greatly influenced companies such as Time Warner, RJR Nabisco, and Yahoo, as well as hedge fund manager Dan Loeb, Bill Ackman, Eddie Lampert, Kirk Kerkorian, and Nelson Peltz. These business bigwigs are known for investing in struggling companies in order to help them thrive again, and some of them, including Loeb, have made their fortune doing it. Despite some failed attempts by activist investors like Icahn and Ackman to get a company back on its feet, the majority of the work these individuals do has been proven effective. In a study titled “The Long-Term Effects of Hedge Fund Activism,” researchers from Harvard, Duke, and Columbia found that in 2,000 cases of investor activism between 1994 and 2007, the activists’ interventions made the companies more profitable.

“We find no evidence that interventions are followed by declines in the long term; to the contrary, activist interventions are followed by improved operating performance during the five-year period following these interventions,” the study explains. Despite contemporary opinions about hedge fund activists doing more harm than good, they actually are quite proven to help companies become more profitable after implementing major changes.

Learn more about the long-term effects of investor activism by reading the latest report.