Batten down the hatches, the activists are coming!
“New entrants are pouring into shareholder activism,” and “the floodgates are open,” JPMorgan’s corporate defense team wrote in a new report. Assets in activist strategies are up 9% since 2014, hitting $129.7 billion. Activists may be crawling all over Wall Street like ninjas, but firms like JPMorgan smell opportunity, reports the Wall Street Journal. JPMorgan, Goldman Sachs, and Morgan Stanley are all offering activism defense services to corporate clients. No, physical defense classes aren’t included.
Activist investors are feeling powerful, moving beyond just governance demands. They’re now influencing capital allocations and strategic firm changes. In 2015, more than 50 new investors broke into the activist ring., increasingly focused on corporate strategy. There was a six year high this proxy season of investor threatening a “proxy fight,” reports JPMorgan.
Second generation activists are starting their own firms. Scott Ferguson, protege to Bill Ackman, launched Sachem Head Capital Management in 2013 and grabbed a big stake of Animal Heath Company Zoetis last year. Ackman’s Pershing Square Capital Management just announced a $5.5 billion stake in Mondelez International. Pershing has voiced that it thinks the company can cut costs and push faster revenue growth.
Photo: Doug Wertman