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Lazard's Quarterly Review of Shareholder Activism – Q3 2021

Oct 19 2021

Lazard's quarterly review of shareholder activism compiles and analyzes data on key activism trends globally.

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Key observations from the third-quarter 2021 report include:

U.S. activity leads global market in 2021 YTD

●    123 new campaigns have been initiated globally in 2021 YTD, in line with 2020 levels, but below historical averages

          - Year-over-year stability primarily driven by a strong start to the year, with Q3 new campaigns launched (29) and capital deployed ($8.5bn) below multi-year averages

●     U.S. share of YTD global activity (54% of all campaigns) remains elevated relative to 2020 levels (45% of all campaigns) and in-line with historical levels

          - The 66 U.S. campaigns initiated in 2021 YTD represent a 27% increase over the prior-year period

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●     The close of Q3 and beginning of Q4 have seen elevated new campaign activity (15+ new campaigns between 9/27 and 10/8), potentially portending a busy end to 2021

●    After a slow start to the year, Elliott remains the most prolific activist in terms of launched campaigns (12), with six new global campaigns reported in Q3, including Citrix, Toshiba         and SSE

 Fewer number of board seats secured by activists

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●     73 Board seats have been won by activists in 2021 YTD, below historical average levels

           - While H1 Board seat activity was stable relative to prior years, only two new Board seats were won in Q3, an unusually low level

●     Through Q3, only 10% of Board seats secured by activists were won through final proxy votes, below the multi-year average of ~17% 

M&A related activism centers on opposition to deals

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●      45% of all activist campaigns in 2021 YTD have featured an M&A-related thesis, above the multi-year average of 39%

●      Scuttling or sweetening an announced transaction remained the most prominent M&A demand, accounting for 53% of such campaigns YTD

           - While 100% of H1 2021 M&A-related campaigns in Europe were focused on opposing announced transactions, Q3 saw the return of campaigns pushing for a sale, break-up or               divestitures

ESG investing in focus

●       Investor statements regarding their integration of ESG considerations have come under increasing scrutiny, with a wide range of regulators and market commentators                             questioning investor claims

●        Nevertheless, inflows into U.S. ESG funds continued their record-breaking pace, as passive funds attracted the majority of YTD inflows ($31.4bn vs. $19.9bn in actively                             managed funds)

 

 

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