Okapi Partners Grows Alongside Activist Investing
To build its business in the ever-more fast-paced world of corporate America, Okapi Partners makes its first acquisition, buying Market Intelligence Group, a stock surveillance and shareholder intelligence firm.
By Michael Brown
Shareholders, including activist investors, have gained a much louder voice in corporate America since the 2008 financial crisis. And the role of proxy solicitors such as Okapi Partners LLC has grown in tandem with the volume of that voice.
“The past 10 years started out with tremendous volatility and there were significantly undervalued companies in which investors saw value,” Bruce Goldfarb, co-founder, CEO and president of Okapi in an interview with The Deal. “[Investors] recognized that there could be even more value by becoming vocal with the companies in which they invested.”
Founded in 2008, Okapi has worked with everyone from activist investors such as Paul Singer’s Elliott Management Corp, to management teams at CVS Health Corp. (CVS) to private equity firms such as H.I.G. Capital LLC, and just about everyone in between. The company’s bread and butter is working with insurgent investors or company management teams on defense tactics when an activist comes knocking.
With activism on the rise, in 2017 there were 803 activist campaigns at U.S. corporations, up from 737 for all of 2016, according FactSet Research Systems Inc. Okapi has built its business since 2008 through investment in proxy solicitation and investor response.
But on Thursday, Feb. 1, to address growing demand for more information in the ever-more fast-paced world of corporate America, the company agreed to acquire Market Intelligence Group LLC, a stock surveillance and shareholder intelligence firm, its first acquisition.
“Based on listening to the needs of many clients and advisers, we realized that it would be beneficial for Okapi Partners to provide stock surveillance in-house,” said Goldfarb. “With Okapi Market Intelligence Group, we can provide our clients access to what stock surveillance’s services can offer but also enhance it with the work that we do and our experiences with a company and its shareholders.”
Market Intelligence’s services, which can track up-to-date stock holdings and sense patterns in shareholder ownership in almost real time, can provide leverage for all types of investors, company management and advisory shops.
To prevent being caught by surprise, corporate executives are turning to stock surveillance companies to help them identify insurgent investors early, before their allocations are required to be disclosed publicly through filings with the Securities and Exchange Commission.
And in situations where an activist is already publicly agitating for change these services are helping corporate boards get a handle on their quickly transforming shareholder base as other activist investors, arbitrageurs and insurgent fund manager-backers start accumulating shares in droves. In addition, activist investors may be interested in a stock watch service so they can get up-to-date information about a company’s shareholder base. That could help them decide whether to launch an activist campaign in the first place or, if they have one underway, how the investor base might respond.
Goldfarb told The Deal that Okapi began to explore the possibility of bringing Market Intelligence’s services in-house about six months ago and that discussions got going in earnest toward the end of 2017 about an acquisition.
“Whether we are working for a public company on its annual meeting, an M&A campaign or engagement outreach or advising an activist investor, understanding a company’s constantly-changing shareholder composition is integral to the success of any voting campaign,” added Patrick J. McHugh, co-Founder and senior managing director at Okapi, in a statement.
Walt Schuplak, Founder and Managing Partner of Market Intelligence, will become a managing director of Okapi Partners and head of its new subsidiary, Okapi Market Intelligence Group.
“Investor monitoring and market intelligence have always been part of Okapi Partners’ services to clients, but we are now formalizing this offering under Okapi Market Intelligence Group and adding Walt’s analytical expertise and keen eye for determining changes in share ownership,” said Goldfarb.
Okapi is one of a number of proxy solicitation firms along with MacKenzie Partners Inc., D.F. King & Co. and Georgeson Inc. Goldfarb and McHugh founded Okapi after stints at Georgeson.