Ken Moelis, CEO of the investment bank Moelis & Co., believes corporate boards should stand firm against activist investors.
"We think the pendulum has swung too far where corporate boards are treating activists like they've already won," Moelis said in a CNBC interview from the Morgan Stanley Financials Conference in New York.
Moelis said he is advising corporate clients to stay calm and stick with their strategy for growth.
"I think growth is much more desirable," Moelis said.
He said the markets are less focused on firms returning capital, as they were two years ago, and that companies that use capital to generate growth will reap greater rewards.
Moelis, who founded his company in 2007 and took it public in April, told CNBC that after a pause, the initial public offering market should open up again as volatility eases.
He also said he sees regulation changing the landscape of the investment banking industry.