Yet with the first quarter of 2018 seeing the largest amount invested by U.S. activists in European companies since at least 2013, European corporations are starting to take notice. Now that global bank Barclays is in the spotlight and Whitbread has been prevailed on to spin off cafe chain Costa Coffee, both excitement and concern are growing.
A few firsts and a finale
In a sign that activists have developed a less syncopated rhythm, some funds have laid low during the past six months while others picked up the slack. After a quiet 2017, Carl Icahn has made new demands at four companies, while Starboard Value has matched its haul of eight companies publicly subjected to demands from H1 2014. The gamechanger, however, has been Elliott Management. The New York-based fund has more than tripled its number of yearto- date targets over the past four years to 16 companies, extending beyond merger arbitrage and the technology sector to utilities and corporate restructurings, including three members of the Hyundai Group.
Moreover, with 524 activists making public demands worldwide so far this year, including first-timers Mudrick Capital Management, Nathan Miller and Peter O’Malley -– who joined late-2017 newcomers Blackwells Capital and Roaring Blue Lion – there is no longer a guarantee that the next campaign will be from a dedicated activist hedge fund.
To prove the point, Appaloosa Management and Senator Investment Group dialed up the heat on Allergan between April and June, while T. Rowe Price said it would no longer issue a “request for activist” if frustrated with a company, preferring to make its views heard more plainly.
Quick and not dirty?
With traditional value-focused activists Jana Partners and ValueAct Capital Partners launching side funds emphasizing the contribution of environmental and social goals for companies, the tools utilized by activists continue to broaden. Jana has so far been the more vocal of the two, partnering with the California State Teachers’ Retirement System (CalSTRS) under retiring corporate governance chief Anne Sheehan to ask Apple to implement more stringent parental controls on its iPhones. ValueAct appears to be focused on investing in companies with an advantage over peers in their sustainability, likely a less confrontational approach.
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