“Activist Wolf Packs” Could Close in on European ESG Laggards

The latest A&M Activist Alert report suggests poor ESG scores are an early warning sign that a company could be targeted by activists.

The A&M Activist Alert is an analysis and predictor of shareholder activism in Europe.  A&M used ESG ratings by Refinitiv of 1,300 European companies to segregate them into a ranking of four quartiles. Going back to 2017, A&M looked at each quartile to determine how many of its companies faced an activist attack.

A&M: The lower your ESG, the higher the risk of activist attack

A total of 62% of activist targets across Europe since 2017 fall into the bottom two ESG quartiles, observed the study. Moreover, companies in these groups are, on average, 24% more likely to face an activist campaign.

“As the focus on ESG grows in the minds of investors and the wider public, ESG performance has now clearly entered the sights of activist investors,” said Malcolm McKenzie. He is Managing Director and Head of European Corporate Transformation Services at A&M.

Further, “this compelling link between ESG ratings and the likelihood of activist targeting should serve as a wakeup call to boards across Europe. Those who have overlooked ESG issues risk activist wolf packs closing in,” he said.

Other findings of AAA

Activism gathers momentum in Europe as ESG interest flares.

However, the UK’s position as a hotbed of activist action is eroding as activism across Continental Europe gathers momentum.

Countrywise activism risk by number of companies:

  • UK 54
  • Germany 25
  • France 24

Sector-wise activism risk by number of companies:

  • Industrials 52
  • Technology 24
  • Consumer 32

Note that out of the activist target companies predicted in A&M Activist Alert in April, 33 did actually meet with activist action.

[Related Story:  Christopher Hohn: Activist Manager, Climate Warrior  ]

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Alt Insights

December 6, 2019

SIFMA: US Economy Will Expand in 2020 But at a Moderate Pace

SIFMA: US Economy Will Expand in 2020 But at a Moderate Pace
Shape

Latest Alternative Investment News

Hedge Fund Asia Research & Capital Management Shorts Premier Oil
December 9, 2019     Hedge Funds, Investments, News

Premier Oil is the target of a massive short position. Asia Research & Capital Management (ARCM) has reportedly built a massive bet against the energy company.

Magnetar Capital Aims to Launch $400 Million Health Fund
December 9, 2019     Alternative Investments, Investments, News

Magnetar Capital will launch its first healthcare hedge fund in 2020. The firm aims to close a $400 million fund by mid-2020, according to Bloomberg. The company will look to…

Hacker Uses Ingenious MO to Siphon $1M from VC Firm
December 9, 2019     Digital Assets, News

Security researchers at cybersecurity firm Check Point relate how Chinese hackers hijacked $1 million of seed money that was supposed to travel from a Chinese venture capital firm to an…

Hedge Fund Billionaire Bill Ackman Looks for 50% Returns in 2019
December 9, 2019     Alternative Investments, News

Billionaire Bill Ackman and his hedge fund are having a great 2019. Last month, Ackman’s hedge fund added another gross return of 3.4% — or 3.2% after fees. This gain…