A sea change in shareholder activism across Asia has seen the number of companies publicly targeted more than double between 2013 and 2016, according to Activist Insight data.
As many as 38 companies had been subjected to public demands by the end of the first half of 2017, more than in 2013 as a whole and setting the stage for a projected year-end total of 65. And while 2017 volume is anticipated to fall slightly, activism is far from losing momentum.
Activist Insight editor-in-chief Josh Black says: ‘Although activity remains dramatically lower than in the US, several developments suggest activism in Asia will continue to increase, including governments pushing for improved corporate governance, new domestic activist fund launches, and the ready availability of opportunities.
‘Deterrents, such as controlled companies and suspicion of outsiders can be dispelled with sustained effort. But activists have been working more closely with management teams and gaining their trust before or in place of going public with demands.
‘Witness Elliott Management’s second campaign at Samsung, Third Point’s share buyback campaign at Fanuc – where few gave Third Point a chance – and efforts by behind-closed-doors activists such as Taiyo Pacific Partners, which told us this summer that it takes executives on a kind of industry sabbatical to teach them about finance.’
The report also reveals that activists are increasingly looking to foreign institutional investors and family offices as fertile ground for their campaigns.
‘Foreign institutional investors tend to be more independent of local banks and pension services and therefore have a different mind-set, as well as being influenced by western governance standards. Family offices may also have fewer ties and be more interested in profitable investments than relationships,’ says Black.
The data was compiled by Activist Insight for a special report entitled Activist Investing in Asia.
