Activist investors’ growing appetite for corporate change
More investors than ever are adopting an activist playbook and their appetite shows no signs of waning.
Once criticised as enfants terribles seeking short-term gains at the expense of a target company's longer-term interests, activists last year saw first-timers grow by a third and broke records in terms of numbers of companies and regions affected.
In this animated video, the FT’s Arash Massoudi explains these investors' strategy and the collateral damage they can cause.
Activists such as Elliott Management’s Paul Singer and Nelson Peltz of Trian Partners buy companies’ stakes and use them to lobby for change, aiming to increase the target's share price. In 2018, activists won the largest number of seats at public companies ever.
But investor activism is no longer a US prerogative. A third of all campaigns last year were initiated in Europe and Asia Pacific.
This boom, Massoudi warns, is only the beginning.