However, it is remarkable that the average market capitalization for total activism was at its highest in the past four years at $21.04 billion .Since 2017, the number of 13D filings has decreased each year with only 48 new activist 13D filings in 2020, compared to 61 in 2019, 65 in 2018 and 71 in 2017. While there was a drop off in the number of 13D campaigns, the average market capitalization increased and the dollars invested in new 13D campaigns increased.
The number of UTT campaigns in 2020 was fairly consistent with 2019, but the big story of 2020 UTT activism, is the surge in megacap activism, with the market capitalization of targeted companies nearly doubling in 2020. This is because there were six campaigns in 2020 at companies with market capitalizations in excess of $150 billion . This is more than the total megacap activism over the past three years combined - 2019 had one situation and 2018 and 2017 each had two situations.
The industries engaged by activists were remarkably consistent between 2019 and 2020. The top four industries made up 63% of all activism in 2019 and 56% in 2020. Those industries did not change from 2019 to 2020 and remained in the following order: Consumer Discretionary, Health Care, Information Technology and Industrials . The remaining industries had no real material change between years.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.