The difference between an activist investor and a passive investor is all about the investing strategies which both investors utilize in the financial markets.
What an activist investor normally does is to buy a controlling stake in a company in order make management changes so that the end result will make the company more valuable than it used to be.
The following is a list of investors who can be labelled as activist investors:
- Private Equity Firms
- Venture Capitalists
- Angel Investors
Passive investors are not necessarily interested in changing the way a business is run as compared to activist investors. But instead they are usually investors who may engage in speculation or try to capitalize on trending markets.
Activist investors are business people who are interested in the day-to-day operations of the business whilst passive investors are business people who invest money into a business for the sake of trading stocks or speculation.