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4/29/2029

Shareholder Activism in Asia Drives Global Total to Record High

Nikkei Asia (04/29/29) Shikata, Masayuki

Activist shareholders had their busiest year on record in 2024, with the Asia-Pacific region making up a fifth of campaigns worldwide, pushing some companies higher in the stock market and spurring others to consider going private. The worldwide tally of activist campaigns rose by six to 258, up by half from three years earlier, according to data from financial advisory Lazard. Campaigns in the Asia-Pacific tripled over that period to 57, growing about 30% on the year. Japan accounted for more than 60% of the regional total with 37, an all-time high. Activity is picking up this year as well in the run-up to general shareholders meetings in June. South Korea saw 14 campaigns, a jump of 10 from 2023. Critics say South Korean conglomerates are often controlled by minority investors that care too little about other shareholders. Australia and Hong Kong saw increases of one activist campaign each. North America made up half the global total, down from 60% in 2022 and 85% in 2014. Europe had 62 campaigns last year. The upswing in Japan has been fueled by the push for corporate governance reform since 2013 and the Tokyo Stock Exchange's 2023 call for companies to be more mindful of their share prices. The bourse has encouraged corporations to focus less on share buybacks and dividends than on steps for long-term growth, such as capital spending and the sale of unprofitable businesses. Demands for capital allocation to improve return on investment accounted for 51% of activist activity in Japan last year, significantly higher than the five-year average of 32%. U.S.-based Dalton Investments called on Japanese snack maker Ezaki Glico (2206) to amend its articles of incorporation to allow shareholder returns to be decided by investors as well, not just the board of directors. Though the proposal was rejected, it won more than 40% support, and Glico itself put forward a similar measure that was approved at the following general shareholders meeting in March. U.K.-based Palliser Capital took a stake last year in developer Tokyo Tatemono (8804) and argued that more efficient use of its capital, such as selling a cross-held stake in peer Hulic, would boost corporate value. Activist investors are increasingly seeking to lock in unrealized gains from rising land prices, reaping quick profits from property sales that can go toward dividends. Companies in the Tokyo Stock Exchange's broad Topix index had 25.88 trillion yen ($181 billion at current rates) in unrealized gains on property holdings at the end of March 2024, up about 20% from four years earlier. After buying into Mitsui Fudosan (8801) in 2024, U.S.-based Elliott Investment Management this year took a stake in Sumitomo Realty & Development (8830) and is expected to push for the developer to sell real estate holdings. This month, Dalton sent a letter to Fuji Media Holdings (4676), parent of Fuji Television, calling for it to spin off its real estate business and replace its board of directors. Activist campaigns have sparked share price rallies at some companies. Shares of elevator maker Fujitec (6406) were up roughly 80% from March 2023, when it dismissed Takakazu Uchiyama -- a member of the founding family -- as chairman under pressure from Oasis Management. The rise in demands from activists "creates a sense of tension among management, including at companies that don't receive such proposals," said Masatoshi Kikuchi, chief equity strategist at Mizuho Securities. Previously tight cross-shareholdings are being unwound, and reasonable proposals from minority investors are more likely to garner support from foreign shareholders. Some companies are going private to shield themselves from perceived pressure. Investments by buyout funds targeting mature companies in the Asia-Pacific were the highest in three years in 2024, according to Deloitte Touche Tohmatsu. Toyota Industries (6201) is considering going this route after facing pressure from investment funds last year to take steps such as dissolving a parent-child listing with a subsidiary and buying back more shares. Toyota Industries holds a 9% stake in Toyota Motor (7203). The automaker "may have proposed having [Toyota Industries] go private as a precautionary measure," said a source at an investment bank.

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5/1/2025

Opinion: Elliott’s AI Target Is an Omen to Stagnant Boards

Bloomberg (05/01/25) Hughes, Chris

Two of the best-known shareholder activists — Elliott Investment Management and Cevian Capital — are engaging companies with complex structures and second-rate governance. But even soft targets can be hard work, writes Bloomberg Opinion columnist Chris Hughes. The art of activism is to find a company that’s lost its way but has a good business at its core. The stock’s weak valuation may be a symptom of poor operating performance, which is in turn explained by the challenges of managing a conglomerate structure. Idiosyncratic governance is often a major concurrent factor. The board sets strategy, after all. Take Elliott’s latest target, Hewlett Packard Enterprise Co. (HPE), the tech firm with a market value of $21 billion. The activist has built a more than $1.5 billion position and plans to engage, Bloomberg News reported last month. It’s not hard to see why HPE is the name in the frame. For an activist, it’s like walking into Walmart — your shopping list is right there in front of you. Firstly, HPE is clearly in attractive markets — artificial intelligence servers, networking and the cloud. Analysts expect revenue to grow 8% in the current financial year. The stock market valuation relative to earnings sits below server rival Dell Technologies Inc. (DELL) and networking rival Cisco Systems Inc. (CSCO). You would want it to land between them. Lower profitability is one issue, as Morgan Stanley analysts point out. The tripartite structure arguably also gives HPE a conglomerate feel — and that’s ignoring an additional small financial services arm. HPE stock cratered in March after management revealed it had mishandled server pricing in its financial first quarter. That reinforces the impression that conglomerates get punished more harshly than pure-play businesses when they slip up. Meanwhile, the board looks stale. It’s been refreshed with four new appointments in the last six years. Even so, six of its 12 members have been there more than nine years. Chief Executive Officer Antonio Neri is a company lifer. Long tenures are a threat to objectivity and independent thinking. Age brings experience and wisdom, but board composition should be a balancing act. HPE may believe there are advantages in being in areas with overlapping customers. If so, why isn’t it working for the share price? The pending $14 billion acquisition of Juniper Networks Inc. — now mired in an antitrust investigation — makes it hard to contemplate structural change, such as a separation of the networking business, in the short term. Nevertheless, HPE could arguably refresh its board at a faster pace. Cevian’s most recent target, Swiss insurer Baloise Holding AG (BALN), embodies similar issues despite being in a wholly different industry and shows what activism can achieve. Baloise has a strong presence in its home market but suffered from governance flaws, in this case a 2% cap on shareholders’ voting rights regardless of their stake. The company had deviated from its domestic core, geographically into Germany and thematically into venture capital. In April last year, shareholders including Cevian mobilized to amass the support required to win a motion scrapping the voting ceiling at the annual meeting. With governance normalized, Cevian raised its stake to 9.4% while pressuring the company to simplify. That meant a couple of public statements expressing dissatisfaction with the state of progress — positively shouty behavior for an activist that normally keeps a low profile. While Baloise looked like a takeover target for larger peer Zurich Insurance Group AG (ZURN), last week brought a nil-premium all-share merger with Helvetia Holding AG (HELN) instead. That’s a worse outcome for the activist than an all-cash bid. Fortunately for Cevian, Helvetia’s main shareholder agreed to buy its stake, providing a tidy exit. What Cevian paid on average for its stake and achieved on the sale isn’t clear. Total returns on Baloise’s stock price since November 2023 (when Cevian’s interest became public) and the Helvetia transaction last week were more than 70% in US dollar terms. Even if Cevian’s gains were only around 40%, that would still have been twice the total return of European stocks in the period. It’s not the best outcome for Cevian. But it’s still a good outcome. For activist investors, it’s a reminder that you can’t control the circumstances of your exit from a position, but you’ll probably do well from finding fundamentally sound businesses with scope for governance upgrades. For businesses, the moral is that if your structure and governance aren’t beyond reproach, you have no margin for error.

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4/30/2025

The Evolving Face of Corporate Activism

Nasdaq (04/30/25)

In 2024, the number of activists and activist campaigns rose to their highest levels since 2018. Amid an evolving landscape, boards and management are wise to prepare in advance – strategically and tactically – for a possible activist campaign. Information, communication, awareness, and strategy are key. To explore emerging trends in corporate activism, the Nasdaq Center for Board Excellence recently hosted a webinar, The Evolving Face of Corporate Activism. Panelists, Derek Zaba, Partner at Sidley, Pamela Codo-Lotti, Global Chief Operating Officer of Activism and Shareholder Advisory at Goldman Sachs, Tyson McCabe, Head of Americas Advisory at Nasdaq, reflected on the landscape and offered guidance and recommendations for boards. Citing Nasdaq’s latest report, Shareholder Activism: 2024 Year in Review, McCabe noted several key findings regarding activism campaign targets. Key takeaways from the 2024 activism landscape include: Activism remains a persistent feature of the corporate landscape with campaigns at an all-time high; M&A related demands, such as selling the company, spin-offs, and asset sales, are increasingly common; and Small and mid cap companies remain the most engaged by activists, but campaigns against large and mega cap companies are increasing. Codo-Lotti echoed Nasdaq’s findings, sharing large and mega cap companies are becoming prime targets of activists who need to deploy more capital at a very fast rate and expand their toolkits. While the issues driving activist activity tend to cycle up and down, some remain fairly consistent, including CEO performance, strategy, financial outcomes, and governance (specifically, the board). Today, new activists continue to emerge, extending a trend that began about 10 years ago. Among the webinar attendees who participated in a poll, 48% indicated their company has experienced a scenario with shareholder activism, and 11% indicated they are currently in an activism situation. “Engaging means different things,” explained Codo-Lotti. “It depends on who the activist is, what their stake is, and the tone of their demands.” She advised that, depending on the situation, engagement could be staged, starting with the company’s Investor Relations Officer, and subsequently involving the CFO, CEO, and potentially the board. This staged approach allows the company to gather more information and to prepare the executive leadership team for further conversation. When a company is approached privately by an activist, engaging privately is often the best strategy, concurred Codo-Lotti and Zaba. The goal of a private engagement is to understand the activist’s thesis, end goal, and next steps or intentions, and ultimately to find common ground and achieve a peaceful resolution, if one is possible. Zaba also emphasized the need to be well-prepared for non-private approaches made by activists. If approached publicly and aggressively by an activist, there is no time for the company to prepare, which is unlike the more common situation where the activist first approaches a company privately. To be prepared, it is important for boards to have a decision-making process in place, know who their internal and external advisors are, and have a set of communications materials ready to go. If not, Zaba warned, companies may make disastrous decisions that could haunt them for the duration of the campaign. Whether approached publicly or privately, boards must be unified and willing to commit to their position. Ahead of any challenge, boards should take the time to understand and discuss the company’s vulnerabilities and how teams are preparing, as well as engage in scenario planning such as simulations and tabletop exercises. To better prepare for an activist campaign, panelists emphasized the importance of taking proactive steps and adopting a “be your own activist” approach. Codo-Lotti noted that she often spends just as much time helping prepare her clients as she does defending them. She focuses on fundamental and tactical actions essential to an effective strategy: Fundamental actions begin with “being your own activist and looking very objectively at your company’s business performance relative to peers and history.” Codo-Lotti further advises her clients to conduct a portfolio review to evaluate assets and possible divestitures, review the board’s skills to identify any gaps, and proactively examine the alignment of incentives between management and shareholders. Tactical actions are focused on understanding exactly how the company will respond should an activist letter arrive tomorrow. Two elements of the tactical strategy include, employing a “break the glass plan” to develop a set of protocols that clearly lay out the ‘what,’ ‘how,’ and ‘who’ related to the company’s response, as well as understanding the company’s shareholder base and monitoring any accumulation of shares that might signal potential activist activity. Zaba also noted that tabletop exercises can be an effective tool to help boards think through and talk about issues and situations ahead of time – and a facilitator can help guide the discussion about how they would react to and handle various activist situations. Boards should take the time to hear from management and advisors about the company’s vulnerabilities and what steps are in place to prepare. Annual meetings dedicated to this proactive exercise are useful because they help to confirm board unity and provide an opportunity to discuss any potential disagreements among board members. Companies – and their boards – are challenged to be on alert for potential activist activity and other vulnerabilities. Codo-Lotti noted that companies are beginning to engage with executive teams and department heads in simulations to make sure that everyone knows how activism fits into the broader value-driven structure. McCabe also recommended that companies engage a surveillance or stock watch firm to look for telltale signs (e.g., a facilitated derivative acquires a large amount of lending, material broker dealer filings suggest a broker may be acting on behalf of an activist or hedge fund, etc.).

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4/30/2025

Elliott Releases Episode of "Streamline 66" Podcast Series Featuring 1:1 Conversation with Director Nominee Michael Heim

PRNewswire (04/30/25)

Elliott Investment Management L.P., which manages funds that together make it a top-five shareholder in Phillips 66 (PSX) (the "Company" or "Phillips"), today released the fifth episode of the Streamline 66 Podcast. The series features 1:1 conversations with Elliott's highly qualified director nominees, as well as industry experts. The latest installment features Nominee Michael Heim, who has a long record of leadership in the energy industry as a founder of Targa Resources, one of the most successful Permian-focused midstream operators, and as a member of multiple boards. Mr. Heim said: "The assets are very good…If you look at what they've got on a map, they're in the major basins in the United States. They should be up there competitively with their peers, and they haven't been." "For them to turn things around, [Phillips 66 Midstream] has to have a strategy and they've got to have a Board that is interested in funding their organic growth. Organic growth is where you have higher rates of return. They've got to have a management team that's incentivized based upon their own success. It can't be based upon what's going on in the refineries…they've got to have their own leadership. And they have to have the governance to make sure that the direction that they're headed is the way that maximizes shareholder return." "It's got great bones. With the right amount of capital and the right discipline, [Phillips 66] should be able to trade like a midstream company does. As it improves its reputation with its producers, it ought to trade in parallel with its peers.

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4/29/2025

Opinion: Elliott Has a Point on BP’s Ballooning Costs

Reuters (04/29/25) Chen, Yawen

Elliott Investment Management has a point about BP Plc (BP), according to Reuters columnist Yawen Chen. Paul Singer’s activist investor group wants the $76 billion oil major, which reported first-quarter results on Tuesday, to cut costs more aggressively. Having allowed key operating expenses to balloon $10 billion since 2019 — or 30% — BP has minimal grounds to push back. Elliott, now BP’s third largest shareholder with a stake around 5%, dislikes CEO Murray Auchincloss’s recent strategy reset. His pivot away from a failed transition into low carbon energy was less ambitious than it had recommended. Investors seem to agree: BP’s market value has shrunk 19% since the update, while European rival Shell’s (SHEL) fell only 8%, and U.S. competitor Exxon Mobil (XOM) lost 1%. "That’s a microcosm of BP’s general underperformance in recent years," suggests Chen. "The cost inflation is hiding in plain sight," he continues. "Between 2019 and 2024, BP's combined production, manufacturing and distribution expenses soared from $33 billion to $43 billion. That wouldn't matter if growth and profitability rose too. But over the same period operating expenses as a percentage of EBITDA rose from around 70% to nearly 100% in 2023, Barclays analysis indicates. They reached 113% in 2024, according to Breakingviews calculations." Differing cost metrics complicate direct comparisons with BP's fellow UK energy giant, Shell. But BP's $196 billion rival saw its own expenses fall from $37 billion to $36 billion between 2019 and 2024. Its opex also fell as a percentage of EBITDA, and BP now employees 100,500 people compared with Shell's 96,000. "Elliott thus has some ammo in its ask for BP to bump up its free cash flow," notes Chen, "which Auchincloss's target envisages growing by around 20% each year through to 2027 and hitting $14 billion by the end of that year. The activist reckons that number should be more like $20 billion, with $5 billion of the $6 billion gap filled by fresh cost cuts." One way to do this would be to hack away more aggressively at green hires made by ex-CEO Bernard Looney, which have left BP staffed up in less profitable areas like hydrogen. Some $2 billion to $3 billion could be trimmed from distribution and administration expenses alone, a source told Reuters.

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4/28/2025

Congress Is Shining a Light on Proxy Advisory Firms

Forbes (04/28/25) Winegarden, Wayne

The House Committee on Financial Services’ April 29th hearing titled “Exposing the Proxy Advisory Cartel: How ISS & Glass Lewis Influence Markets” examined “the role and influence of proxy advisory firms…in shaping corporate governance and shareholder voting outcomes.” It’s about time, writes Forbes contributor Wayne Winegarden, a Senior Fellow in Business and Economics at the Pacific Research Institute and Director of the Center for Medical Economics and Innovation. Proxy advisory firms exist because the SEC requires institutional investors to vote on all matters put forth in proxy statements, or the measures voted on during shareholder meetings. For most institutional investors keeping up with all the issues raised during shareholder meetings is overwhelming, so they turn to proxy advisory firms for help. Proxy advisory firms help institutional investors manage this herculean task. They do the leg work and advise institutional investors on how to vote on the thousands of shareholder resolutions that arise every year. Two proxy advisory firms – ISS and Glass Lewis – control 97% of the market. Given the sheer volume and importance of proxy statements every year, these two firms have acquired tremendous influence over corporate governance. Unfortunately, inefficiencies plague the proxy advisory market. As the Environmental, Social, and Governance (ESG) issue exemplifies, these inefficiencies weaken corporate governance to the detriment of effective management. While the pressure to implement ESG programs has lessened as of late, numerous ESG programs continue to be raised via shareholder proposals that include requirements to report on companies’ greenhouse gas emissions. When it comes to ESG proposals, the two major proxy advisory firms establish their position without adequate transparency and use a one-size-fits all approach despite the vast differences that ESG programs can have on different companies. As a result, their ESG recommendations can be detrimental for many companies. For instance, when examining the influence of the proxy advisory firms, the American Council for Capital Formation concluded that the ESG recommendations from the proxy advisory firms particularly “disadvantages small and mid-sized companies, in favor of larger companies that have the resources to comply." The proxy advisory duopoly also has an irreconcilable conflict of interest because both ISS and Glass Lewis sponsor their own ESG programs. ISS has a program known as ISS ESG that, according to their website, provides “ESG screening, ratings and analytics designed to enable investors to develop and integrate responsible investing policies and practices into their investment strategies.” Glass Lewis has formed a strategic partnership with Sustainalytics and actively incorporates ESG principles into its proxy voting recommendations. Put differently, the major proxy advisory firms that control 97% of the proxy advisory market have a pre-ordained belief that pro-ESG proxy statements should be supported. This inherent bias in favor of ESG programs is troubling given ESG’s actual performance. Several studies document that ESG-related proxy measures typically harm financial returns. One study in the Journal of Financial Economics examined the impact from activist public pension funds on the market values of a sample of Fortune 500 companies finding that increased activism by public pension funds is negatively correlated with stock returns. Further, the firms receiving proposals from activist public pension funds promoting social agendas were valued 14% lower than similar companies without such agendas. Another study by the Manhattan Institute found that public pension shareholder activism pushed by proxy advisory firms negatively impact share value. The claim that shareholders voted for the proxy measures, therefore the corporation is simply listening to the desires of its owners, also rings hollow. The majority of “shareholders” voting on these proxies are institutional investors that are simply voting the recommendations from ISS and Glass Lewis. These impacts are worsened when the institutional investors automatically adopt the proxy advisory firm’s recommendation without further scrutiny – a practice referred to as robo-voting. The empirical results indicate that ESG programs are detrimental to corporate performance and rarely achieve their lofty aims. The proxy advisory firms’ predisposition to view these programs positively illustrates an important disconnect between the advice from proxy advisory firms and the potential financial interest of the specific company. The ESG issue exemplifies why fundamental reforms to the proxy market are warranted. The overarching goal of the reforms should be to better align the interests of the proxy advisory firms with the interests of fund shareholders. Specific reforms should include ensuring that proxy advisory firms act in a manner that promotes fund managers’ fiduciary responsibilities to shareholders, creating greater transparency regarding the proxy advisory firms’ biases and conflicts of interest, and creating greater transparency regarding the methodology the proxy advisory firms used to determine their recommendations. While currently plagued with misaligned incentives, proxy advisory firms play an essential role in the financial markets; but the market must be structured correctly. Fixing the flaws that pervade the current market is an opportunity that the 119th Congress should not let slip away.

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4/24/2025

The Elliott Management Maverick Waging War on Big Oil

Financial Times (04/24/25) Mourselas, Costas

John Pike had his target in his sights. The Elliott Management partner was facing off against the chief executive of Phillips 66 (PSX), the oil and gas giant in which he had built a $2.5bn stake, across a Manhattan meeting room. Over the course of an hour, the Texan company and its legion of defense advisers had a final chance to negotiate a truce with the world’s most feared activist hedge fund and avert the type of expensive proxy fight for which Pike was becoming known. They failed. Within 24 hours Elliott had launched one of the most aggressive activist campaigns the energy sector had seen in years with a full-blown proxy battle for four seats on Phillips 66’s board, nominating a slate of new directors. The fight underlines how even as rivals have switched to behind-the- scenes lobbying and Elliott itself has softened its style, Pike embodies the hedge fund’s “old aggressive style,” according to former colleagues. The firm’s campaigns had become increasingly “corporatized and mature,” said another person who has come up against Elliott several times. But even though it emphasized its collegial nature, Pike’s approach stood out, they said, calling him “a lone wolf inside of Elliott who wants to do things a different way." Under Pike, Elliott has taken a series of high-profile energy positions in recent months, seeking to guide the direction of blue-chip companies from BP (BP) in the UK to RWE (RWE) in Germany — as well as at Phillips 66 in the U.S. “If you look at the most interesting campaigns Elliott is running right now, they are all his,” said another person who has dealt with Pike in a number of situations. To those who have worked with him, Pike is considered one of Elliott’s shrewdest investors. A 22-year Elliott veteran, Pike oversees “global situational teams” with specific expertise in energy — as well as utilities, transportation, mining and insurance — and became an equity partner in 2022. Last year, he ascended to its powerful 12-person management committee. A college basketball player who grew up in southern California and later graduated from Yale Law School, Pike’s demeanor is calm and deliberate. He keeps a low profile: the only image of him online is from his nomination to the Phillips 66 board. “It’s not hard to change John’s mind, you just have to be right,” said Quentin Koffey, who worked with Pike for seven years before leaving Elliott and later setting up his own activist fund, Politan Capital Management. “He responds to well-reasoned analysis, and is neither provoked nor swayed by shallow campaign rhetoric or ad hominem attacks.” His investment record points to a more ruthless style. Since Pike first picked a fight with U.S. oil and gas group Hess in 2013, Elliott has invested at least $21.6bn in publicly traded energy companies, according to analysis by the Financial Times and data provider Def 14 Inc. Three of the four campaigns engaging major U.S. corporations in which Elliott has gone so far as to mail proxy materials to shareholders have been led by Pike. Since his battle with Hess, Pike has won 13 board seats across five companies in the energy sector alone. Elliott’s energy campaigns are linked by a common thread: the break-up of large energy conglomerates to refocus them on their core competencies. It routinely calls for asset divestments, as it did at Hess (HES), Suncor Energy (SU), and Marathon Petroleum (MPC). But another link is the firm’s opposition to traditional energy companies owning renewable businesses. Elliott has run one campaign where it supported greater renewables deployment, at a company called Evergy (EVRG) in 2020. The trend has been in the other direction, however. At NRG Energy (NRG) and BP, the activist has pushed for the offloading of renewable businesses — moves that align with the political leanings of Elliott’s founder, Paul Singer, according to people who know him. Others insist the campaigns have nothing to do with personal politics. One former Elliott employee said: “They believe the energy transition?.?.?.?is expensive and time-consuming.” A recent letter to investors said the “net zero” agenda imposed “massive costs” and acted as a “drag on growth." Until recently, this view went against the prevailing wind, where big fund managers encouraged oil majors to push further into renewables and reduce carbon emissions. But since Elliott’s large stake in BP became public in February, the UK oil major has already changed course. Its chair Helge Lund has announced plans to step down, the company has pledged to speed up its pivot away from renewables, and it has fast-tracked $20bn of asset divestments. It has also promised to increase investment in oil and gas by 25%. Elliott wants more. Earlier this week, the hedge fund upped its stake past 5%, and has told the UK energy company that it wants it to boost free cash flow to $20bn by 2027 by more aggressively controlling costs and capital expenditure, according to people familiar with discussions. Changing the course of the roughly £57bn oil major will be no mean feat. “In Europe, board changes are much more difficult,” said Christopher Kuplent, an analyst at Bank of America. “And if you look at the campaigns where [Elliott] have not been able to effect board changes, they have failed.” “BP is the lowest-quality supermajor oil company there is no quick fix,” said Per Lekander, managing partner at hedge fund Clean Energy Transition. Back at Phillips 66, Elliott’s 17-month campaign is reaching a denouement. Unless one side blinks, shareholders will next month choose between the four directors proposed by Elliott and the ones put up by Phillips 66 in a full-blown proxy vote: a Rubicon that Elliott has never crossed against a major U.S. corporation. Phillips 66 this week raised the stakes with a letter to shareholders accusing Elliott of being conflicted due to its pursuit of a rival, Citgo. Success for Elliott increases the likelihood of asset sales, including the company’s midstream business and its chemicals joint venture with Chevron, as well as a shake-up of the management team. Phillips 66 has been Pike’s most combustible campaign since he took on Hess, his maiden campaign in the energy sector that settled just hours before a shareholder vote. Although Elliott went quiet on Hess after just a year, the investor held on to its position there for the best part of a decade before finally cashing out. Taking the fight to Phillips 66 and BP may require the same patience. Rich Kruger, who was installed as Suncor Energy’s chief executive in 2023, a year after Elliott took a stake, said the activist sometimes gave voice to what other investors were thinking. Suncor’s shares gained as much as 41% from when the activist first unveiled its demands in April 2022 and their high in November last year. “I’ve had a lot of hallelujahs from my long-term shareholders about Elliott’s strategy,” he said. “Maybe they’re a little bit more patient and less aggressive than Elliott, but I think they look for the same outcomes.”

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4/24/2025

Investors Report Strong Interest in Proxy Voting Choice

Vanguard (04/24/25)

A recent Vanguard survey of more than 1,000 investors shows a strong interest among investors in having a voice in the proxy voting process. Asset managers have begun offering proxy voting choice programs that enable investors to help direct how their equity index funds vote at company shareholder meetings. The survey delved into investors’ perspectives on these programs, and its results provided key insights about investors’ interest in participating, along with the topics they consider important to weigh in on and their general awareness of proxy voting. Key findings from the survey include that most investors (83%) believe it is important that asset managers consider investors’ preference when casting votes for their funds, with more than half (57%) interested in participating in voting programs. Two-thirds (66%) of investors say they would participate in a proxy voting choice program offered through their employer retirement plan. Fifty-eight percent of investors would be more likely to invest in a fund if they could influence the fund’s proxy voting decisions, while a third (33%) would be willing to change firms if another firm offered them the ability to influence proxy voting. Less than half of investors (47%) are aware that fund managers cast proxy votes at shareholder meetings.

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4/23/2025

Third Point’s Dan Loeb Says He’s Sold Out of Nearly All of his ‘Magnificent 7’ Holdings

CNBC (04/23/25) Li, Yun

Third Point’s Dan Loeb revealed that he has dumped almost all of his positions in the so-called Magnificent 7 stocks after their huge run-up that’s been dented this year from the stock market tariff turmoil. “What we have done in the last few months is number one shifted away from those easy sale candidates of stocks that had been the big winners but that are the easiest to sell from a technical standpoint from people who are repatriating their capital and getting out,” Loeb said while at the Economic Club of New York Tuesday. “We sold out of our Mag 7 holdings. Early on we got out of Meta (META), and reduced our Amazon (AMZN). We got out of basically all of them. I still have a small Amazon position. I think as a strategy what we’re looking at is event-driven strategies and activism,” Loeb said. The Magnificent 7 — Amazon, Microsoft (MSFT), Meta, Alphabet (GOOG), Apple (AAPL), Nvidia (NVDA), and Tesla (TSLA) — has led the market drawdown in 2025 after a two-year monster run. Tesla has been the worst performer this year, down more than 40%, while Amazon, Alphabet, and Apple have all declined about 20%. Concern about AI overspending hit the stocks initially this year, followed by tariffs from President Donald Trump causing investors to further reduce exposure to the names. The popular hedge fund manager said he’s leaning further into credit, especially private credit where he sees “massive” opportunities. Loeb also opined on the recent market turmoil triggered by Trump. He said the sentiment on Wall Street has switched from a sense of optimism at the start of Trump’s term to a feeling of uncertainty and fear of its potential lasting impact. “I think there will be a residual concern about some of the capriciousness with which some of these issues have been dealt with and confidence in the rule of law, in expectations being met,” Loeb said. Last year, Loeb said investments in the “physical world” were attractive as market narrative was dominated by Mag 7 stocks. He gave examples such as aggregates, nuclear power, life science tools, specialty alloy manufacturers, and commercial aerospace manufacturers.

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