A global slowdown in mergers and acquisitions has prompted activist hedge funds to adopt a new tactic as they look to profit from their investments – agitating for changes in company leadership, according to a report by Reuters.
The report cites data from research firm Insightia as revealing that activist investors called for the removal of top executives at 60 US companies last year, an increase of 46% over 2021, and the highest level seen since 2017.
The increase comes amid an overall decline in M&A activity due to higher interest rates. According to Dealogic data, the total value of M&A fell 37% to $3.66 trillion last year after hitting an all-time high of $5.9 trillion in 2021, which means it has become more difficult for activist investors to press companies to sell themselves or divest divisions of their businesses.
