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Lazard's Review of Shareholder Activism - Q1 2018

Apr 11 2018

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

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Key observations from the Q1 2018 report include: 

Activist activity reached new heights in 1Q 2018 both in terms of capital deployed and campaigns initiated

  • ~$25bn of capital was deployed in new campaigns and 73 new campaigns initiated in 1Q 2018 - the most in any quarter on record
  • 65 Board seats were won in Q1 2018, well ahead of 2016 YTD and 2017 YTD – while an additional 78 seats are “in play” 

 

Activism in Europe continued to be robust in 1Q 2018, accounting for ~29% of capital deployed and ~23% of campaigns initiated

  • The $7.2bn of capital deployed in new campaigns against European targets was ahead of the prior year period, suggesting the possibility that 2018 may surpass the 2017 record

Influence of passive investors continued to strengthen as Vanguard, BlackRock, and State Street now own ~18% of the S&P 500 vs. ~14% in 2012

  • Increasing importance has driven these firms to materially expand their stewardship efforts, with BlackRock pledging to double its headcount Vanguard establishing a European presence
  • ESG issues have attracted significant attention by passive investors, who are pushing companies to serve a broader social purpose in their communities

M&A continued to be a core focus, with activists pushing for sales processes, intervening in announced transactions and forcing break-ups and divestitures

 

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