The UK continues to be the most targeted country in Europe for investor activism, and the fourth worldwide, with 42% of all campaigns launched in Europe in 2024 targeting UK companies, according to Alvarez & Marsal’s latest A&M Activist Alert (AAA) Outlook.
This activism is increasingly being driven from the US, with 40% of campaigns against UK corporates in 2024 launched by US funds, the highest proportion seen over the past five years. In total, 23 of 59 campaigns against UK corporates in 2024 were led by US activists, the highest number for three years. Across Europe overall, in 2024, 35% of all public activist campaigns were launched by US funds, a marked increase on 27% of campaigns the previous year.
While governance changes are still the top demand from investors, their importance is on the decline, along with a lower emphasis on environmental and social demands. Calls for operational and strategic changes to boost bottom-line delivery continued to rise, accounting for 19% of all campaigns.
Activist funds, in particular the larger ones, have also been steadily reducing their use of public campaigns, with greater emphasis on private discussions with company Boards to achieve their aims.
André Medeiros, Managing Director and Co-Head of Consumer and Retail, EMEA at A&M, said: “With domestic market valuations reaching new heights, US activists are increasingly turning to Europe, and particularly the UK, to find value. Corporates here continue to underperform against their global peers in delivering gross margins, cash generation and return on capital, which is demonstrated in the significant discounts seen on UK equities. While the much-anticipated return of the M&A market failed to fully materialise this year, there are growing expectations that 2025 will herald further opportunities to unlock value and attract activists.”
Shareholder activism has seen a mixed picture in 2024 across major European markets. The UK, followed by Germany, continue to be the most targeted geographies, with 59 and 38 campaigns respectively, while industrials continues to be the most targeted sector by activists for the fifth year running, accounting for21% of all campaigns in 2024.
The technology sector also saw significant growth, making up 13% of campaigns, with German corporates being a particular focus. French corporate valuations remain relatively high with resilient underlying performance, while Germany has markedly low valuations which is attracting greater activist interest.
