Engaged Capital Collecting on Collections

Engaged Capital, a well-known activist investor, recently acquired a significant stake in the debt collection company, PRA Group, and is pushing for some changes to be made. According to an anonymous source at Engaged, the activist company wants PRA to enhance its efficiency, embrace technology and bring in new leaders to drive the company forward. If these changes don't happen, Engaged Capital is prepared to nominate new directors to PRA's board.

In classic activist investing style, Engaged Capital is trying to add value to its investment by improving the company in the areas where it needs help. In this case, PRA's stock performance has been less than stellar, which Engaged believes is due to the need for a more disciplined approach on PRA's part.

These changes could help PRA take advantage of favorable market conditions - such as a potential uptick in loan defaults due to interest rates remaining elevated after central banks' aggressive hiking programs. The long-term goal, as with most activism, is to see an increase in the investment company's revenue.

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