Sodali has published its report on activist funds for the second quarter of the year, in which Spain moves from 7th to 8th position and in which activist investors reduced more positions than they added. They increased or initiated 798 positions and cut or exited 1,026.
The USA is the leading market for these funds, with a total investment of 242.936 billion dollars, followed at a great distance by the Japanese market ($18.691 billion), French ($16.528 billion), Canadian ($16.386 billion), Dutch ($11.800 billion), British ($10.300 billion), Swiss ($4.100 billion) and Spanish ($3.554 billion).
The largest new individual positions of the quarter were:
- TCI Fund Management in Martin Marietta Materials ($758.4 million, 2.2% of O/S), Deutsche Boerse ($726.4 million, 1.5% of O/S) and Vulcan Materials ($721.9 million, 1.9% of O/S)
- Third Point in Warner Bros. Discovery ($533.2 million, 0.8% of O/S)
- Elliott Management in Nippon Express Holdings ($455.9 million, 6.2% of O/S)
- Sachem Head in Seagate Technology Holdings ($455.5 million)
Two of the main new positions maintained direct dialogue (engagement) with management during the quarter. Following Elliott's entry with a 6.2% stake in Nippon Express Holdings, the firm stated that the company is deeply undervalued compared to its competitors despite its position as the leading operator in Japan, and requested three measures: a pause and reevaluation of the merger and acquisition strategy, measures to increase profitability, and an appropriately sized balance sheet to improve capital efficiency.
Starboard Value opened its 3.1% O/S position in Dynatrace arguing that the company is undervalued compared to its peers due to the slowdown in revenue growth and a lack of confidence in a corporate strategic turnaround. Its requests include an accelerated share repurchase programme (arguing that over $2.5 billion could be returned in three years) and an increase of at least 500 basis points in the adjusted operating margin for fiscal year 2029 through sales productivity, cost control, and operational leverage.
TCI's changes had the greatest impact: it holds $78 billion, 38% of all non-quantitative activist capital; four and a half times more than the next largest firm, Cevian Capital, with $17.4 billion. TCI accounts for $12 billion of the $25.9 billion increase (due to the revaluation of securities) in reported value this quarter, that is, 46% of all movement.
