Rise of the Reluctavists
Ethical Boardroom, a publication that analyzes corporate governance issues, published an article authored by Steve Wolosky entitled “Rise of the Reluctavists.” The article sheds light on a new breed of activist investors comprised of shareholders who have been historically passive, but who are now engaging in various forms of activism, from behind-the-scenes dialogue with management to full blown letter-writing campaigns and election contests. Steve notes that he is seeing a significant increase in the number of new entrants to the space who are exploring potential activist campaigns. These shareholders, which he dubs ‘reluctavists’, are increasingly willing to use forms of activism in an effort to catalyze change at a struggling portfolio company. Olshan clients RiverNorth and H Partners are noted in the article as two examples of “reluctavists” who have launched an activist campaign. Steve suggests that we will continue to see a steady increase in the number of passive investors flirting with activist tools as they seek to unlock value at their underperforming portfolio positions.