A handful of billionaire Wall Street titans are increasingly making life miserable for corporate boards of the largest companies in the world.
Activist investors are targeting fewer companies than in recent years, but the most powerful among them are setting their sights on ever larger trophies and deploying capital at a record clip in 2017.
Through the first three quarters, activists plowed $US45 billion into 124 new campaigns targeting companies whose market capitalisation exceeds $US500 million, according to a report released this week by investment bank Lazard.
The number of targets is below the pace of 181 from 2015 and about even with 2016.
But deployed capital beats the $US41.5 billion mark through the first three quarters in 2015 and more than doubles the $US19.3 billion pace from 2016.
“Activism is as busy as we’ve ever seen it, ” said Jim Rossman, managing director of Lazard’s shareholder advisory business. “It is in full bloom.”
Just a handful of firms account for $US20.8 billion in new positions, nearly half of the the total.
These funds are run by four of the most powerful titans of Wall Street: Paul Singer of Elliott Management, Bill Ackman of Pershing Square Capital, Dan Loeb of Third Point Capital, and Nelson Peltz of Trian Fund Management.
These billionaire investors are coordinating battles with ever-larger corporations, increasingly shifting their gaze toward Europe. Nearly 20% of the capital deployed in 2017 targeted European companies — up from 10% in prior years.
That includes Dan Loeb’s campaign against $US264 billion Swiss food and beverage company Nestle — his fund’s largest ever bet — as well as Paul Singer’s against $US23.2 billion Dutch conglomerate Akzo Nobel.
The trend toward Europe is due in part to the global nature of the assets these conglomerates own, according to Rossman, as well as the fact that the companies are increasingly owned by players hedge funds are familiar working with: colossal asset managers like BlackRock, Vanguard, and State Street.
Singer’s Elliott Management stands out above the rest. His firm has deployed $US9.9 billion in capital over 12 campaigns, more than double second-place Bill Ackman’s Pershing Square. That includes waging — and winning — a bidding war against Warren Buffett for bankrupt power company Oncor.
The firm manages about $US33 billion and its flagship fund has a compounded annual return of 13.5% since launching on February 1, 1977, according to investor documents previously reported by Business Insider.
Check out the rest of the funds that have been the most aggressive so far in 2017: