Shareholder activists poised for a resurgence in 2021

As the dust begins to settle, shareholder activists are making a comeback

Activist investors took a pause at the start of the COVID-19 pandemic, adopting a “wait and see” approach and shoring up capital to deploy once the dust settled. As the macroeconomy became more stable, though, activity picked up again. 

A total of 155 new campaigns were launched in North America in 2020, down 28% from 2019, according to data from Acuris publication Activistmonitor. The number of campaigns targeting companies with market caps of US$10 billion or more dropped by 41%, from 29 in 2019 to 17 in 2020. The number of activist campaigns launched in EU countries also fell year on year, although at a more modest rate—with 59 newly launched campaigns in 2020, compared to 62 in 2019.

Despite this annual drop, the number of campaigns ticked up toward the fall: October alone saw 16 new campaigns launched in North America, three more than in the same period the previous year and the highest number since March 2020. In the EU, the fourth quarter saw 16 new campaigns, one more than in Q4 2019. 

According to a new report by insightia and Activist Insight, the industrials sector showed the greatest increase in activism activity 2019 to 2020, with a 3.3 percentage point (pp) rise. Real estate followed, with a 1.4 pp increase, while consumer cyclical and consumer defensive each posted a 2.3 pp drop.

Bold US campaigns signal intentions for 2021 

The final quarter of 2020 saw the return of bold campaigns. Technology, media and telecommunications (TMT) remained the most targeted sector, growing year on year: A total of 55 campaigns accounted for 35.5% of all activity in 2020, compared with 49 campaigns taking up a 22.9% share in 2019.

Dan Loeb’s activist hedge fund Third Point has been particularly vocal in the sector. In October, the activist called on Disney to suspend its annual US$3 million dividend to shareholders, instead using the cash to invest in its Disney+ streaming service—which is in fierce competition with Amazon and Netflix.

Just before the end of the year, the activist hedge fund called on Intel to explore its strategic options after losing market share to Taiwan Semiconductor Manufacturing Company, AMD and Samsung. And early in 2021, Intel announced that VMWare CEO Pat Gelsinger will be replacing Bob Swan as CEO of the company—a move that was praised by Loeb.

UK remains at the center of European activism 

With a total of 17 activist campaigns recorded in 2020, the UK continued to be Europe’s center of shareholder activism. Yet there were 10 fewer campaigns targeting UK firms compared to 2019, reflecting the global decrease in activity seen during the COVID-19 pandemic.

The UK’s asset management sector has become a prime target for activists, as active investors are forced to compete with the rising trend of passive investing. In October, activist hedge fund Trian acquired a 10% stake in asset manager Janus Henderson, calling for consolidation among underperforming asset managers.

The UK is expected to be the center for activist campaigns in 2021, as Brexit-effect uncertainty, compounding the COVID-19 pandemic’s impact on the economy, negatively impacts valuations. The impact of the COVID-19 crisis has served to expose weaker companies that will become prime targets for activist activity in 2021. 

ESG issues set to influence activist agenda

The events of 2020 have brought environmental, social and governance (ESG) issues into sharp focus. From mounting concerns around climate change to addressing social inequality and diversity issues, companies are looking to “future-proof” their businesses against the range of ESG risks they are facing. 

Companies that are lagging behind the pack in ESG ratings risk lowering their valuations, and as such have become prime targets for activists. As a result, ESG issues will increasingly drive activists’ investment theses and campaign rhetoric—particularly when it comes to issues of sustainability and board diversity.

Smaller activists are making their voices heard on ESG issues. Newly launched fund Engine No.1 took aim at Exxon in the final month of 2020, pushing the company to increase its already high focus on clean energy. In January, the activist firm nominated four directors with expertise in clean technology to Exxon’s board.

Engine No.1’s high-profile campaign has received backing from CalSTRS, the California State Teachers’ Retirement System, one of the largest public pension funds in the world. This comes as large institutional investors increasingly feel comfortable supporting activist shareholders. Meanwhile, the energy industry is facing the dual challenge of supporting the energy transition while also maintaining profits—conditions which make the industry more likely to attract activist attention. 


While activist investors chose to wait on the sidelines for much of 2020, they have remained active behind the scenes—using their time to raise funds and prepare for a busy 2021. The COVID-19 crisis has highlighted secular trends in energy transition and digitalization—and it has exposed those companies and industries that are well positioned to cope with these long-term changes, and those that are ill equipped. 

As the dust starts to settle and the global economy begins its recovery, activist investors are in a strong position to identify and target companies ripe for activist involvement.

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