Sodali has published its report on activist funds for the second quarter of the year, in which Spain fell from 7th to 8th position and activist investors closed or reduced more positions than they added. They increased or initiated 798 positions and trimmed or exited 1,026.
The US is the top market for these funds, with total investments of $242.936 billion, followed at a considerable distance by the Japanese market ($18.691B), French ($16.528B), Canadian ($16.386B), Dutch ($11.800B), British ($10.300B), Swiss ($4.100B), and Spanish ($3.554B).
The largest individual new positions for the quarter were:
- TCI Fund Management in Martin Marietta Materials ($758.4 million, 2.2% of O/S), Deutsche Boerse ($726.4 million, 1.5% of O/S), and Vulcan Materials ($721.9 million, 1.9% of O/S);
- Third Point in Warner Bros. Discovery ($533.2 million, 0.8% of O/S);
- Elliott Management in Nippon Express Holdings ($455.9 million, 6.2% of O/S); and
- Sachem Head in Seagate Technology Holdings ($455.5 million).
Two of the top new positions engaged in direct dialogue with management during the quarter. Following Elliott’s entry with a 6.2% stake in Nippon Express Holdings, the firm stated that the company is deeply undervalued compared to its competitors despite its position as Japan’s top operator, requesting three actions: a pause and reassessment of the M&A strategy, steps to boost profitability, and a right-sized balance sheet to improve capital efficiency.
Starboard Value initiated a 3.1% O/S position in Dynatrace, arguing that the company is undervalued relative to peers due to slowing revenue growth and weak confidence in a corporate turnaround. Its demands include an accelerated share buyback program (arguing that over $2.5 billion could be returned over three years) and an increase of at least 500 basis points in adjusted operating margin by FY2029 through sales productivity, cost control, and operating leverage.
TCI’s moves drove the largest impact: it holds $78 billion—38% of all non-quantitative activist capital—which is four and a half times more than the next largest firm, Cevian Capital, at $17.4 billion. TCI accounts for $12 billion of the $25.9 billion increase (resulting from asset appreciation) in reported value this quarter, representing 46% of the entire gain.
