Activists Find Lots of Targets and, in Private Equity, Flush Buyers
It’s shaping up to be a busy activist season, which is producing some new investor alliances.
Activist investors have increasingly been pulling pages out of the private-equity playbook, a trend likely to continue, given synergies between the two financial specialties.
Private-equity firms had nearly $2 trillion in dry powder looking for deals as of February, according to S&P Global. Meanwhile, after two years hampered by the pandemic, activists are having no trouble finding companies in need of shareholder prodding, in light of worries over inflation, supply chains, geopolitics, the Federal Reserve, and falling share prices.
Put another way, there’s no shortage of activist ideas or money to see them through.
“This provides activists with all they need to do what they do best, which is find holes in company strategies,” Jim Rossman, co-head of capital markets advisory at Lazard , told Barron’s.
There have been 73 activist campaigns launched in the first quarter of this year, well above the 55 campaigns in the year-ago quarter. And deal making appears to continue to be an impetus for activists to target a company—either by pushing for buyouts, spinoffs, or mergers.
Last month Nielsen Holdings (ticker: NLSN), which had been targeted by Elliott Investment Management, agreed to go private in a $16 billion deal also backed by Brookfield Asset Management (BAM). And CoreLogic was taken private by private equity’s Stone Point Capital and Insight Partners last year after initially being prodded by activist fund Senator Investment Group and holding company Cannae Holdings .