Activist Investors Engaged in a Record Amount of Campaigns Last Quarter

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This past quarter was the busiest on record for activist investors with 83 campaigns launched globally, the Financial Times reported. With companies no longer navigating a world health crisis and facing significant profit declines, activist investors are in overdrive.

The Times They are a Changin

More than 50% of 2023’s activist activity has taken place in Europe and Asia. In South Korea, one of the most active activist investors is Changhwan Lee’s Align Partners, which launched eight campaigns last quarter. Align gained plenty of attention recently when it successfully took on SM Entertainment. Using a 1% stake, Lee convinced the K-pop powerhouse to drop its contract with music producer Like Planning — a firm owned by SM Entertainment’s founder — claiming that the ties between the two companies have been “damaging shareholder value.”

Surprisingly, the US has seen a 30% dip year-over-year in activist activity, but that’s largely because brash and brazen American investors are plying their wares abroad. For example, Paul Singer and his hedge fund Elliot Management have submitted proposals to provide financing for the Manchester United football club, creating more competition for British billionaire Jim Ratcliffe and Qatari royal Sheikh Jassim bin Hamad Al Thani, both of whom want to buy the team outright.

The other reason for the remarkable inactivity stateside is that some of the most high-profile moments for US activist investors have just fizzled out:

  • Salesforce activist investors, including Singer (this guy is everywhere), were circling the cloud-based software company but backed off once the company announced 8,000 job cuts and delivered revenue numbers that beat Wall Street’s predictions. Nelson Peltz of Trian Partners scrapped plans for a Disney proxy war after a recently-returning Bob Iger gave Peltz what he’d been agitating for: $5.5 billion worth of cost savings and 7,000 pink slips.
  • Though not as immediately serious as full-blown activist campaigns, shareholders filed more than 540 resolutions in the US this quarter, urging public companies to address environmental, social, and governance issues, according to Proxy Preview. Even with activist investors pushing hard, ESG resolutions have proven resilient. NPR reported that last year, shareholders withdrew a record 110 proposals that were focused on climate change after they struck deals with companies.

I Didn’t Vote For You: Activist investors have a new arrow in their quiver thanks to the recent Securities and Exchange Commission universal proxy rule. Previously, company management and shareholders were allowed to nominate board members and investors would vote in person, by mail, or electronically. But the only way to vote for nominees put forth by dissident shareholders was if you actually showed up to the vote in person. Per the new rule, candidates submitted by any shareholders must appear on any form of the ballot. You know, like regular voting.