2017 was one of the busiest years for shareholder activism, with more than twice the amount spent on campaigns in 2016. As the nature and scope of shareholder activism are undergoing dramatic changes, the negative connotations that accompanied shareholder activism in the 1980s could be a thing of the past. A decline in the aggressive nature of activism is making place for concerns over long–term effects on local communities, employees and the environment. The changes are driven by a new generation of activists, former portfolio managers who operated during the time of the “Founding Fathers” of shareholder activists in the 1980s, who are striking out on their own. The new generation, going by the moniker “Sons of Activists”, have a more data–driven investing style and an eagerness to work with management behind closed doors, holding positions for longer. As opposed to earlier activists, this new breed is seen as acting more in the interest of all shareholders, becoming more operational, strategic long–term investors in order to deliver company changes driving shareholder value. With an increasing number of more institutional and less aggressive players on the field, activism is seen as having gone mainstream.
The new generation shows just how activism has evolved. Although the target - making money – remains the same, the new generation is eschewing public disputes and open confrontations, proving that in some cases the apple does fall far from the tree. In light of recent success stories exemplifying the shift, including most recently the case of DE Shaw`s Settlement with the US home improvement retailer Lowe`s, companies are becoming more receptive to cooperation with activists and settlements behind closed doors.