JPMorgan: Serial activists deliver strongest returns

A small group of repeat activists generates market-beating shareholder returns.

Activism is increasingly dominated by a small group of experienced repeat campaigners, with serial activists generating materially better returns than occasional entrants to the strategy.

Around 70% of activist investors were involved in just one campaign between 2018 and 2026, according to a new report by JPMorgan, while more than 80% participated in no more than two campaigns.

However, the report found that campaigns led by investors involved in at least 10 activist situations since 2018 generated around 9% more alpha over one- and two-year periods than campaigns launched by less active peers.

The outperformance of serial activists is largely a result of greater experience dealing with boards, better campaign selection, greater resources to dedicate to a campaign, and more established reputations.

Companies may also take demands more seriously when they come from established activists.

Indeed, JPMorgan found that campaigns led by established activist firms saw a more sustained share-price reaction than less-active investors who often see the stock return to typical levels within a year.

Among the firms identified as serial activists were established names such as Elliott Investment Management, whose campaigns have spanned sectors ranging from technology and energy to industrials and healthcare. Other prominent figures include Oasis Management, Starboard Value and ValueAct.

On Monday, Elliott launched a campaign pushing Australian gold miner Northern Star Resources for a strategic review, arguing that operational missteps and governance shortcomings have prevented shareholders from fully benefiting from record gold prices.

The research also highlighted how shareholder activism has evolved in recent years.

While campaigns have traditionally focused on operational underperformance and governance reforms, activists are increasingly pushing for strategic reviews, portfolio simplification, M&A, and capital allocation changes.

These demands are often aimed at unlocking value that investors believe is not fully reflected in a company's share price.

However, the report found that only 37% of campaigns ultimately achieve all of their stated objectives, underscoring the challenges involved in driving corporate change.

For investors, the findings suggest that the identity of the activist may be as important as the target company itself.

As activism becomes increasingly concentrated among a small group of experienced campaigners, JPMorgan's research indicates that investors may benefit from paying closer attention to activists with established track records of generating shareholder returns and successfully executing value-creation strategies.

Like this article? Sign up for our free newsletter.