An employee makes a pizza next to a Just Eat Plc branded delivery bag in the kitchen of The Fat Pizza takeaway pizza restaurant in Southend-on-Sea, U.K., on Thursday, Dec 19, 2019. raised its bid for Just Eat just minutes after Prosus NV upped its offer, intensifying a battle for ownership of the U.K. food-delivery firm. Photographer: Chris Ratcliffe/Bloomberg
Cat Rock Capital, a hedge fund that invests in stocks, targeted Just Eat in the UK in its first activist battle © Bloomberg

Last year was the biggest on record for campaigns by new activist investors, as asset managers grew increasingly willing to take public stands against company management and hedge funds upped their efforts to boost returns.

Compared with 2018, the number of companies targeted fell 17 per cent to 187, according to data published by investment bank Lazard on Wednesday. But more shareholders than ever opposed company decisions or policies, including many doing it for the first time.

These included Cat Rock Capital, a hedge fund that invests in stocks, which targeted Just Eat in the UK in its first activist battle. Other first-time battles included Scion Capital’s campaigns at Gamestop and Tailored Brands, and new funds Impactive Capital and Caligan Partners’ campaigns. The latter launched fights at Knowles and AMAG Pharmaceuticals, winning board seats in both situations.

“It’s a reflection of this movement of aggressive shareholder behaviour moving into the mainstream,” said Jim Rossman, head of shareholder advisory at Lazard. “It’s totally destigmatised behaviour to wage a campaign.”

There was also a record number of shareholder campaigns that focused on mergers — 47 per cent compared with 33 per cent in 2018, according to the data. Funds pushed for buyers to end or improve existing deal offers, for companies to break up, sell assets, or put themselves up for sale.

Some of the most high profile activists are likely to start the year emboldened by evidence in favour of their approach. HFR’s Activist Index was up 18.3 per cent last year, indicating that activism was one of the best-performing hedge fund strategies.

Pershing Square Holdings, Bill Ackman’s publicly traded fund, returned a record 58.1 per cent last year, while Jana Partners was up 52 per cent; Blue Harbor, Cliff Robbins’s ESG-focused fund, was up 33 per cent; and Land & Buildings, Jonathan Litt’s property-focused activist fund, was up 30 per cent.

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Paul Singer’s Elliott Management and Jeff Smith’s Starboard Value funds were the most prolific activists by far, launching a respective 14 and 13 campaigns and accounting for 10 per cent of all activism.

Other top activists included Paris-based CIAM, one of the few activist funds led by women, which launched six campaigns; Sachem Head, run by former Bill Ackman protégé Scott Ferguson, which started five battles last year; and Praesidium Investment Management and Los Angeles-based Legion Partners, with four campaigns each — the same as Carl Icahn.

Shareholder activists continued to look outside the US for opportunities in 2019, with about 40 per cent of campaigns taking place overseas.

The amount of money activists invested in their targets to win governance and strategy changes at companies fell between 2018 and 2019, from $66.4bn to $42.2bn.

“There was not a lot of overall growth in the number of campaigns, there was a levelling off of the trend, but it was still elevated,” Mr Rossman said. “It shows that activism has become a permanent feature of the corporate landscape.”

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