Governance for Owners Group plans to launch shareholder-activist funds, seeking to raise €1 billion ($1.2 billion) primarily from U.S. pension funds to invest in underperforming European companies, said Peter Butler, co-founder and principal. The group hopes to raise at least €100 million for its initial GO Euro Focus Fund and create more funds as interest grows, said Mr. Butler. It will also market the fund to U.S. endowments and foundations. GO expects to launch the fund in the fourth quarter.
Robert A.G. Monks, corporate governance activist, will be non-executive chairman. Peter C. Clapman Sr., former chief counsel-corporate governance of TIAA-CREF, and William Crist, former chairman of the $186 billion California Public Employees' Retirement System, Sacramento, will lead GO's U.S. operation, Governance for Services USA Inc. Mr. Clapman will be CEO, and Mr. Crist, deputy chairman. Messrs. Monks, Clapman and Crist will be part owners of the GO group. IPGL Ltd., a U.K. private investment firm, will take a substantial minority ownership stake in GO and be an initial investor in the new GO Focus Fund, Mr. Butler said.
GO expects the fund to invest in about 15 companies, taking stakes from about 1% to 10%, said Mr. Butler. The fund will engage boards and management of its portfolio companies through constructive dialogue or seek to influence directors and enlist support from other shareholders to improve investment returns.
Through its U.S. services unit, GO also plans to talk with U.S. companies on behalf of European and Asian institutional investors that own shares in the firms and seek to add value by engagement initiatives to improve corporate governance practices, Mr. Butler said. He estimates non-U.S. investors own about 25% of U.S. companies.
The U.S. unit plans to contract with one or more U.S. proxy-advisory firms to assist with corporate governance research on companies, he said.