Trends And Developments In Shareholder Activism

With $25bn of capital deployed in new activist campaigns - the most in any quarter on record - the first quarter of 2018 marked the continued evolution of shareholder activism from a much-derided niche strategy into a mainstream form of investing and company engagement. The current activist landscape is characterised by three key themes explored in more detail below: increased targeting of smaller-cap companies, settlements between target companies and activist shareholders in lieu of prolonged proxy battles, and the rise of M&A-focused activism.

Background: what is shareholder activism?

Shareholder activism has its roots in the 1980s, when investors began purchasing large stakes in companies and then leveraging that ownership to agitate for change. Criticised by opponents as 'greenmailers' or 'corporate raiders' who sought only short-term personal gains at the expense of long-term benefits, these investors led high-profile campaigns against companies such as RJR