Home > Shareholder Activism > The international evolution of activism

The international evolution of activism

News on activists and their campaigns have multiplied in the last years, and concerns among possible targets has also risen, which may have fostered consultations and analysis on how to prevent an attack and how to react to it when it comes.

In a recent paper, Angela Giovinco, a Sodali executive, tried to understand all these trends. (1)


She refers to some stylized facts:

  • Target companies have become bigger,
  • Activists don`t only focus in unlocking value by replacing managers and directors, or alter the financial strategies in the company. Their strategies have become much more complex.
  • Target companies are not necessarily underperforming companies; they don`t need to be in crisis or restructuring situations, (see Dupont`s case in 2015).
  • Money has recently poured into activist tools, such as hedge funds.
  • Activism started in the USA, in the 1980`s, but since then it has spread to Canada, UK and other European countries.


US hedge funds have been attracted to Europe lately as the economic turmoil has unveiled many deficiencies in some of their typical attack areas: compensation, directors` tenure, etc. Mutual and pension funds attention also became higher.

 Screenshot - 30_05_2015 , 13_02_21

The graphic above is very clear; the number of target companies starts to rise in 2009 and 2010, (+100% and 500%), when 152 companies were targeted. In 2010, several although still only a few companies in the UK, Canada and China were also attacked, the rest in the US. During 2011 and 2012 activism awakens in Europe, but also in Brazil, India, Australia and Hong Kong.

 PAises 2013 14

Activism in Europe is less common in Europe though, (2), and it is also less noisy. Proxy fights and the use of media, very common in the USA, are not seen as appropriate in Europe, where campaigns are more often driven through engagement. It is my personal opinion that more noise would be very helpful in Europe, where engagement activities may be ineffective in companies with controlling shareholders, for instance. If corporate governance deficiencies are overwhelming and engagement is rejected by controlling shareholders, and given the fact that bad corporate governance practices very often hide bad financial, strategic, or operational decisions, and even fraud in some cases, wouldn`t retail and institutional investors welcome much more noise from activist investors that prevent them from increasing their stakes or initiating them? In fact, noise from regulators would also be welcome.




  1. Giovinco, Angela, The Evolution of an Investor Strategy (January 13, 2015). Available at SSRN: http://ssrn.com/abstract=2549179 or http://dx.doi.org/10.2139/ssrn.2549179 . Graphics have been taken from this source.
  2. http://dealbook.nytimes.com/2014/04/17/u-s-activist-investor-turns-eyes-toward-europe/?_r=0

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