Activist hedge fund Starboard Value delivered less than 5% in returns last year, significantly trailing its peers as high-profile campaigns at companies including News Corp and Pfizer struggled to gain traction, according to a report by Bloomberg citing unnamed sources familiar with the matter.
Despite 2024 being a banner year for activist investors — who drove record boardroom shake-ups across corporate America — Starboard underwhelmed. The average activist fund returned 11.5%, according to Hedge Fund Research, while rivals ValueAct Capital and Sachem Head Capital posted 21% and 22% returns, respectively.
Starboard, led by Jeff Smith, has long been a major force in shareholder activism, previously pressuring Yahoo! and Salesforce to make strategic changes. However, the firm’s recent shift toward larger targets has proven challenging. In 2024, the average market capitalisation of its investments jumped to $45bn, up from just $7bn in 2020, according to Bloomberg calculations.
Several of Starboard’s major activist pushes fell short last year with the firm losing a board nomination battle at the software company Autodesk, and failing to force Rupert Murdoch’s media empire to abandon its dual-class share structure.
In addition, Starboard’s board challenge at Pfizer also fell short, despite the firm initially appearing to have support from former executives Ian Read and Frank D’Amelio. Both later backed Pfizer’s existing management and Starboard ultimately opted not to nominate directors at the drugmaker’s upcoming shareholder meeting.
The firm also saw key personnel departures, with business development head Mark Dunn and managing director Tom Cusack leaving, according to sources.
Despite setbacks, Starboard secured victories in 2024, including board changes at Healthcare Realty Trust and Riot Platforms.
Regulatory filings show Starboard’s largest holdings include: internet domain registry GoDaddy; online dating operator Match Group, Pfizer, and consumer products business Kenvue, here it recently nominated four directors, including Jeff Smith, to the company’s board.
