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By Scott A. Barshay, Robert A. Kindler, Carmen X. Lu, Laura C. Turano and Krishna Veeraraghavan from global law firm Paul Weiss Rifkind Wharton & Garrison LLP.
Last year saw global hedge fund activism activity reach record highs, both in the volume of campaigns and the number of new entrants. U.S. activism activity also increased year over year and accounted for nearly half of global activity. With activism now an established investment strategy for delivering returns uncorrelated to the broader equity market, we should continue to see robust activity throughout 2025.
A confluence of factors, however, may see activist strategies evolve in the coming months. These factors include pent-up dealmaking ambitions, a significant pool of private equity dry powder, a changing regulatory environment, shifting macroeconomic conditions, geopolitical turbulence and accelerating structural shifts in the global economy underpinned by the rise of AI and automation. Together, these factors are helping set the stage for the following trends in activism:
Private equity homes in on activist targets
Private equity dry powder has continued to grow along with the pressure to deploy capital. Expectations of improvements to macroeconomic conditions (potentially including lower interest rates) may add further momentum to the rebound in deal activity seen during the second half of 2024. In anticipation of a return to more favorable market conditions, private equity funds ...................... To view our full article Click here
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