Activists: Not Your Usual Suspects

By Peter Lauria

May 30, 2025

The hedge fund was relatively unknown—at least at first. But after it acquired a small position in the company’s stock and took to social media to criticize the leadership and board, the fund suddenly picked up media attention. As momentum grew and other investors started voicing their support, a minor nuisance for the firm mushroomed into a full-fledged activist campaign.

Activist campaigns have hit record highs, creating a stir in boardrooms around the globe. But what’s little noticed is who’s driving them: small funds or newer investor groups—not their bigger, better-known counterparts. Indeed, nearly one-quarter of last year’s record-setting campaigns were by first-timers; never before had newcomers accounted for a greater share of challenges than the top 10 activist firms. “Nowadays, anyone sitting on a couch who wants to become an activist can be one,” jokes Daniel Yunger, a partner at strategic-communications firm Kekst CNC who leads client engagements in M&A, activism preparedness, and proxy campaigns.

He’s not far off. Thanks to social media and the rise of independent journalism, any investor with a (somewhat) compelling message can attack a company and get attention. And the financial performance of the targeted firm hardly matters: A lot of new activist activity revolves around cultural and social causes—either for or against them—which are clickbait for media outlets.

Peter McDermott, head of the Corporate Affairs practice in North America for Korn Ferry, says many firms aren’t prepared for this new kind of activist. That’s evident in the number of CEOs, 27 in all—a 69 percent increase from the four-year average—who were forced to resign last year due to activist pressure. The trend continued as 2025 got underway, with 222 CEOs leaving in January, the largest-ever total for that month. “Any activist campaign, even from an unknown or small firm, can be an existential threat,” says McDermott.

He says that smart firms are realizing that the new breed of activist investors requires new defense measures. These include developing relationships with them and, where warranted, working collaboratively. “Getting to know these firms, and letting them know their concerns are heard, is a much better strategy than ignoring them and acting like they don’t matter,” he says. It can also help management and boards suss out which activists are sincerely looking to unlock strategic value and which are after short-term profits.

Another way to determine an activist’s motives is by studying their playbook. Firms known to engage in activist campaigns frequently use the same tactics at different companies. Building knowledge pipelines can help with negotiations and defense strategies, says Dennis Carey, vice chairman and co-leader of Board Services at Korn Ferry. He says firms are forming response teams so that they are prepared and consistent in how they address activists’ concerns.

But perhaps the best tactic is to stay ahead of the game by looking for ways to cut costs and building more trust with stakeholders.  And such tactics may be working: Data shows that while activist campaigns are up, proxy fights are down. “With so many threats,” Yunger says, “success isn’t in winning a proxy contest, but in preventing one."