While the attack by US investment firm Hindenburg on the Indian Adani Group last year made the most headlines, many other activist campaigns have shaken the boardrooms of companies: from the British major bank HSBC, where activist Ken Lui demanded the breakup of the institution, to the oil giant BP, where climate activists submitted a resolution calling for stricter emission targets.
The flood of campaigns that began in the US with the era of “Corporate Raiders” has now reached Europe and Asia. Investors seeking high financial returns and strategic responsibility are increasingly clashing with corporate leaders they consider subpar.
The guardians of impeccable corporate governance launched a record number of attacks in 2023. More and more dissatisfied shareholders tried to topple top managers in the executive suites or force the sale of companies whose share prices stagnated. According to a study by the investment firm Lazard, there were 252 new campaigns worldwide, an increase of 7 percent compared to the previous year, as reported by the Financial Times.
Data from the American analysis firm S&P Capital IQ also show a record increase in investor activities in 2023, with a total of 961 registered campaigns worldwide.
An interesting trend is the increasing diversity of activists, who are no longer exclusively dominated by hedge funds like Third Point. More than 40 percent of the activists who launched campaigns last year were, according to Lazard, active in this role for the first time.
In general, activists in 2023 focused primarily on the sectors of technology, media and telecommunications (TMT) as well as financial institutions in the trend-setting US market. The regional banking crisis at the beginning of the year offered opportunities for activists or strengthened their negotiating position with existing investments.
As data from the consulting firm FTI Consulting show, the financial sector was targeted nine times in the third quarter of 2023. At least 16 campaigns were launched in the final quarter, building on the 53 campaigns in the first half of the year.
This is not only due to the liquidity bottlenecks of the banks in the spring of 2023, but also to the fact that shareholders are demanding greater disclosure of transition plans, such as how their financing activities are to be aligned with emission reduction targets or the Paris climate goals.
Another interesting trend, according to S&P, is the increase in activist campaigns targeting large companies. This increase in large companies suggests that size alone will not be a sufficient defense tactic against well-funded and well-thought-out activist campaigns.
The current year is expected to bring a similar high level of battles in the boardrooms, if not even higher. Campaigns by activist investors who acquire minority stakes in companies to drive strategic changes have been increasing year by year since about 2017.
In the Swiss financial sector, things are likely to be quieter this year, as activists have already prevailed with obvious problem children like Temenos and GAM. However, the Zurich private bank Julius Bär could become a target for activist investors after the debacle surrounding the bankruptcy of the real estate group Signa and the associated losses in share price. So far, however, there are no signs of this.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | 🇺🇸 🇮🇳 🇬🇧 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Ken Lui |
| Companies | S&P Capital IQ, FTI Consulting, Julius Bär, HSBC, Signa, BP, Lazard, Adani Group, US-Investmenthaus Hindenburg, Third Point |
| Currencies | None |
| Securities | None |
