ANALYSIS: SVB Collapse, Proxy Preparation Kept Q1 Activists Busy

With proxy season on the horizon, activist investors in Q1 eagerly launched campaigns and targeted industries potentially impacted by the Silicon Valley Bank collapse. But proxy fights are off to a slower start than usual as we head into Q2.

Activists launched a total of 135 public investor campaigns in Q1, pushing campaign counts to the highest first-quarter total since before the Covid-19 pandemic, according to Bloomberg data.

So far, only 18 of those 135 campaigns (13%) have escalated to a proxy fight. But activism campaigns launched in the first quarter of the year are the most likely to involve such a fight because of their proximity to proxy season. Fifty-two of the 135 public investor activism campaigns were launched just last month—and many still have time to make their way onto the proxy ballot before looming deadlines.

On average, 23.4% of activist investors initiated a proxy fight in the last five Q1s. Heading into proxy season, we should watch for at least a few of Q1’s campaigns to evolve into proxy fights and bring the percentage of proxy contests toward this historical average.

Activists Target Biotech & Finance Companies

Activists launched 21 public campaigns against financial companies in Q1, the most the sector has faced in any quarter since Q1 2021.

The runner-up sector for activist targets in Q1 was health care, with 19 public campaigns—the sector’s highest quarterly total since Bloomberg began tracking global investor activism campaigns in 2017.

SVB’s collapse in March may be causing activists to eye targets in these sectors.

Eleven of the 21 public campaigns launched in the financial sector in Q1 were against banks, and 14 of the 19 health care campaigns targeted biotech and pharmaceutical companies—SVB’s primary client base. Activism in these sectors will likely continue for some time as companies deal with the aftershocks of the collapse.

Bloomberg Law subscribers can find related content on our ESG Practice page, Practical Guidance: Proxy Regulation, as well as our Practical Guidance: Shareholders page. Data accessible at BI ACT <GO>.

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