May 16, 2018

Activism: A Rising Tide in Asia

Shareholder activism in the U.S. & Europe has been a growth industry for at least a decade – and this Bloomberg article says that in recent years, companies in Asia have attracted increasing attention from activists as well. This excerpt says that Asian companies should be on high alert:

Activists, both homegrown and American, are coming after bloated balance sheets and family-controlled firms, and succeeding more often than hitherto in forcing through higher dividends and board changes.

Whether it’s because the Japanese and South Korean governments want their companies to respect minority investors’ interests, or because the activists themselves have adopted a less abrasive style, Asia is a hunting ground like never before. Last year, 31 percent of total involvement by activists outside the U.S. was in the region, up from just 12 percent in 2011, according to a report by JPMorgan Chase & Co.

In addition to big U.S. names like Elliott Management & Third Point, Asia-based activists such as Japan’s Sparx Group Co. & Hong Kong’s Oasis Management Co. and PAG Asia Capital have gotten into the game in a big way. According to this recent J.P. Morgan report, activist campaigns in Asia accounted for 31% of total non–U.S. activism activity in 2017 – that’s up from only 11% in 2011. Campaign volume has grown at a compound annual growth rate of 48%, & in 2017, 4 of the 10 most targeted non–U.S. countries were in Asia.

John Jenkins