Key observations from 2019 report include:
Activist activity returns to multi-year trend after record 2018
- 187 companies targeted by activists, down 17% from 2018’s record but in line with multi-year average levels
- Aggregate capital deployed by activists (~$42bn) reflected a similar dip relative to the ~$60bn+ level of 2017/2018
- A record 147 investors launched new campaigns in 2019, including 43 “first timers” with no prior activism history
Activism against non-U.S. targets accounted for ~40% of 2019 activity, up from ~30% in 2015
- Multi-year shift driven both by a decline in U.S. targets and an uptick in activity in Japan and Europe
- For the first time, Japan was the most-targeted non-U.S. jurisdiction, with 19 campaigns and $4.5bn in capital deployed in 2019 (both local records)
- Overall European activity decreased in 2019 (48 campaigns, down from a record 57 in 2018), driven primarily by 10 fewer campaigns in the U.K.
- Expanded activity in continental Europe – particularly France, Germany and Switzerland – partially offset this decline
Record number of M&A-related campaigns
- A record 99 campaigns with an M&A-related thesis (accounting for ~47% of all 2019 activity, up from ~35% in prior years) were launched in 2019
- The $24.1bn of capital deployed in M&A-related campaigns in 2019 represented ~60% of total capital deployed
- The technology sector alone saw $7.0bn put to use in M&A related campaigns
Activist influence on boards continues
- 122 Board seats were won by activists in 2019, in line with the multi-year average
- Consistent with recent trends, the majority of Board seats were secured via negotiated settlements (~85% of Board seats)
- 20% of activist Board seats went to female directors, compared to a rate of 46% for all new S&P 500 director appointees
- Activists nominated a record 20 “long slates” seeking to replace a majority of directors in 2019, securing seats in two-thirds (67%) of the situations that have been resolved
- Actively managed funds saw ~$176bn in net outflows through Q3 2019, compared to ~$105bn in 2018 over the same period
- ESG focus continues to grow: over the past two years, the AUM represented by signatories to the UN’s Principles for Responsible Investment increased ~26% to ~$86tn, and the number of assets in ESG-related ETFs increased ~300%
- The Business Roundtable’s “Statement on the Purpose of the Corporation” emphasized the importance of companies incorporating the interests of all stakeholders, not just shareholders, into their decision-making processes
- The SEC’s guidance on proxy advisors sought to increase accountability and oversight standards in their company evaluations
Download the review to read the findings in full.
