Shareholder activists have long been a feature of corporate life in the United States. But as the field becomes more crowded at home, established US-based activist investors are looking overseas for opportunities. And their focus has been on companies in Asia.
Analysis from Activist Insight highlights the number of activist public actions in the region has steadily increased in each of the past four years. Asian companies are now more targeted by activists than their counterparts in Europe.
There is no doubt that the public profile of engagements between activists and boards in Asia is growing, be it arguments over corporate structure in South Korea, questions regarding capital in Japan, or demands for reorganisation and divestitures in Australia.
Previously, Asia has been seen as a relative backwater for shareholder activism. This is partly due to a greater propensity for listed companies to have controlling shareholders, often founders and family interests, or embedded government interests. The prevalence of cross-shareholdings among groups of affiliated listed companies is also an issue, as is greater relative passivity among institutional and retail investors, cultural resistance to US-style activism, and local environments that are generally less litigious and confrontational.
However, while culture is important, the disparity in shareholder activism between Asia and other markets is also a reflection of the maturity of the markets in question.