Adaptive Advocacy: The Reinvention of Shareholder Activism

Abstract

This contribution traces the evolution of shareholder activism, examining its transformation from the 1980s era of “corporate raiders” to the sophisticated hedge funds of today, who strategically exploit opportunities within varying regulatory and business environments. It explores the global expansion of activism and analyzes how ownership structures in the US, UK, and Europe shape activist tactics, particularly in navigating the challenges posed by controlling shareholders. Modern activists employ increasingly nuanced strategies—including private negotiations, media leverage, and alliances with institutional investors—to advance their objectives. The paper also highlights the growing importance of coalition-building, which not only enhances activists’ influence and credibility but also helps balance short-term financial gains with long-term corporate value creation.

Hedge funds, in particular, have demonstrated remarkable adaptability in shifting market conditions. Emerging stronger from the 2008 global financial crisis than before, they subsequently positioned themselves at the forefront of the climate movement by capitalizing on ESG and sustainable investing—while also exploiting crises such as the Covid-19 pandemic and the oil shock following the war in Ukraine. Today, they are once again adjusting to a changing economic and political landscape, adeptly navigating the new era of protectionist policies and deregulation.

Keywords: shareholder activism, corporate raiders, coalition-building, activist, institutional investors, corporate value, regulatory constraints, ESG

JEL Classification: G34, G38, K22