Will 2018 Reveal The Naked Swimmers?

2017 was a stellar year for activist investment funds on aggregate – with the amount of capital invested swelling to more than double that of 2016. Globally, the segment deployed a whopping $62 billion of investment capital - through 109 activists, who executed 194 campaigns globally through the year, according to data from industry veteran Lazard. ¹

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In the increasingly politically aware and socially responsible business climate we are operating in today, companies stand to benefit from incorporating activism-based perspectives into their strategic operations. Issuers and activists have improved engagement with shareholders overall and activists were therefore also able to win an additional 100 board seats in 2017 – driving the five-year total to 551. ¹

2017 - Calmer Waters

The stars may have been aligned for the agendas of long activist investors and target companies in 2017 – fueled by a persistent, low volatility, equity market bull run. As we might expect, opportunities in this environment were not so readily available for activist shorts – prompting many to take long positions to reduce risk. However, many activist shorts are speculating this bull has overrun its true value – and stepped up scrutiny of non-cyclical stocks, fraud, and accounting irregularities into year end, according to recently released research from segment specialist, Activist Insight. ²