Bill Ackman may have hung up his activist breeches this year, but there seems to be a new generation of young guns emerging that is just as willing to take on companies.
The investment bank Lazard recorded 73 new activist campaigns globally in the first three months of 2022, the most since it started systematically collecting data on the strategy back in 2014.
This is very likely a record. Jim Rossman, Lazard’s co-head of capital markets advisory, tells us that he is confident that no period before 2014 was this busy either. The aggregate value of the new activist positions was $15.8bn, already equal to about 40 per cent of last year’s total.
Unsurprisingly, the US accounted for most of the new activists campaigns (even though Cevian Capital’s tilt against Vodafone might be the most eye-catching one of the recent batch). However, what really stands out is who is behind them.
While veteran activists Carl Icahn and Jeff Smith’s Starboard Value were both aggressive in the first quarter — launching four and three new campaigns respectively — debutante activists accounted for a notably higher proportion of activity than in prior years, according to Lazard.
Alongside them are a batch of lesser-known but veteran activists who have now struck out on their own after leaving larger firms: people like Scott Ferguson and Paul Hilal, two former lieutenants of Ackman, and former Elliott executive Quentin Koffey. They’re older and more experienced than Ackman, Loeb and Elliott’s Jesse Cohn were when they fired off their most memorable screeds to underperforming companies.
That said, one of the most intriguing activist battles of 2022 is a little different from the classic scenario of an outsider railing against supine management.
Snehal Amin of Texas-based WindAcre Partnership, a veteran of Sir Chris Hohn’s TCI, has built up a 27 per cent position in TV ratings group Nielsen worth nearly $3bn. But he is using it to oppose a $15bn private equity bid.
If Amin forces a bigger payout (which is the likely play here) he will have managed to mug a buyout consortium organised by Elliott Management — one of the most feared activist in the business — underscoring how the stakes have changed.
Rossman attributes the spurt of activist campaigns to stock market volatility, post-Covid economic reopening, technological disruption and inflationary pressures, which has opened up a lot of opportunities for activists.
After all, times have been good in the stock market over the past decade, curbing the anger of most long-term shareholders and arguably shrinking the pool of undervalued companies.
But it is in the wake of downturns — like the dotcom bust, the 2008 crisis, and this year’s trash crash — when many of today’s activists, like Ackman, Icahn, Loeb and Paul Singer’s Elliott Management, built up their firms.
It remains to be seen whether this is just an unusual spike, or whether it is the start of a new trend. But with people like Ackman publicly retiring from classic activism, and other veterans like Nelson Peltz speaking a bit more softly, there may be an opening for others that still fancy instilling the fear of God into C-suites.