Wednesday, June 12, 2024

Hedge fund activism rebounds in 2022

  • Big focus on tech opportunities as hedge fund activism returns after pandemic
  • 36% increase tracked by Lazard, up to 235 campaigns in 2022
  • This year starts with Elliott’s Salesforce campaign

There was a 36% increase in activist campaigns last year, as hedge funds zeroed in on opportunities offered by the stock market selloff, particularly in technology.

Investment bank Lazard tracked 235 campaigns, up from 173 in 2021 and the highest since 2018 (249). Annual numbers dropped below 200 during the pandemic-defined years of 2020 and 2021 but rebounded last year.

“Technology was the most frequently targeted sector in 2022, representing 21% of activist targets,” Lazard reported.

“The extraordinary decline in valuations created an opportune environment for activists who approached the sector in record volumes — especially in the US, where the technology sector accounted for 27% of 2022 campaign activity.” 

M&A-related campaigns represented 41% of all campaigns last year, mainly driven by an increase in break up demands in Q4.

“Challenging market conditions shone a spotlight on the logic behind keeping disparate businesses together.”

In an example of the tech focus, it emerged this week that Paul Singer’s Elliott Management has built a multi-billion dollar stake in Salesforce, one of many large technology firms to lose value in last year’s selloff.

Jesse Cohn, managing partner at Elliott, said the firm was looking forward to “working constructively with Salesforce to realise the value befitting a company of its stature” in a statement.

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