Tuesday, January 31, 2023

Activists Engine and Bluebell wage vocal campaigns


  • Engine eyes change at Univar; Bluebell seeks Fink’s removal as BlackRock CEO
  • Two firms show big impact of high-profile campaigns
  • 39% rise in campaigns in first nine months: Lazard

Engine Capital Management and Bluebell Capital Partners are continuing to make waves with high-profile activist campaigns.

The two firms, based either side of the Atlantic, demonstrate how hedge funds with moderate assets can have an outsized impact in activism.

It has been a busy year for the shareholder activism strategy, with a 39% rise in the first nine months, from 123 to 171 campaigns, according to Lazard data.

Engine Capital, the New York-based activist led by Arnaud Ajdler, who teaches value investing at Columbia Business School and was formerly a partner at Crescendo, is waging a public campaign on Univar Solutions.

Engine owns about 1% of the chemicals distributor and recently called on its board to initiate an aggressive share buyback and initiate a review of strategic alternatives, including a sale.

Ajdler’s firm is not to be confused with Engine No. 1, another small US activist which had a big impact with a successful campaign to elect three new independent directors to ExxonMobil’s board last year.

London-based Bluebell is led by Giuseppe Bivona and Marco Taricco, who founded the firm after identifying shareholder activism, which had been a big US trend, as a growing European opportunity.

They have taken out a new position in BlackRock and called for Larry Fink to be replaced as CEO after failing to live up to commitments on ESG, according to the Wall Street Journal.

Their campaigns on GlaxoSmithKline, Glencore and GAM have previously attracted headlines.

Engine and Bluebell, which both manage less than $500m, have similar return profiles, with strong double-digit returns in 2021 followed by more muted numbers in 2022.

Engine made 1.9% in the first ten months after a 32.6% rise in 2022. Bluebell Active Equity Fund declined 1.5% in the year to 18 November but gained 24.3% last year.

“We’re going to see many more instances of smaller activists with stinging campaigns against target companies,” said Grant Fuller, founder of Irithmics, which uses AI and deep learning technology to analyse institional investor behaviour.

“Campaigns are becoming more analytical and surgical, and optimised to win the support of fellow shareholders.” 

AFI will be exploring activism trends in 2023. Email Will Wainewright with relevant information or interview ideas.