Among campaigns that lost some shareholders money were Icahn’s efforts at Nuance Communications Inc. and Ackman’s involvement with J.C. Penney Co.

The findings were embraced by activists including Icahn and Relational co-founder David Batchelder, who said in interviews their internal fund data showed targets continued to outperform the S&P 500 years after exiting the investments.

Such results, said Icahn, 78, may undermine arguments long- held by activist critics, foremost among them Martin Lipton, a founding partner of corporate defense law firm Wachtell, Lipton Rosen & Katz in New York and pioneer of raider repellents including the poison pill.

“It shows Marty Lipton is completely wrong, he’s been wrong for 30 years,” Icahn, billionaire manager of Icahn Enterprises LP, said in a telephone interview. “And it proves the short-termism argument wrong.”

Higher Profits

Lipton, 82, said that studies showing benefits for shareholders are misguided and don’t consider how an activist’s campaign might push a company to take short-term steps that sacrifice longer-term objectives. He cited as an example a stock buyback that may result in more debt or less spending on research and development, hurting its prospects.

“The proper conclusion is that the kind of activism we’re talking about -- the kinds of things that Carl Icahn and Bill Ackman do -- does not lead to improvement in corporations over the long term,” Lipton said in a telephone interview.

A study published last year by Columbia’s Jiang, along with professors from Harvard Law School and Duke University’s Fuqua School of Business, disputes the contention that activism damages companies.

After analyzing about 2,000 activist campaigns launched by hedge funds from 1994 to 2007, Jiang’s team found that the target companies’ valuation and return on assets improved in the five-year period following the interventions. That means they were earning higher profits on less investment. Three years after the activists exited their stakes, shareholders still had positive returns.

Climbing Barbarians