Most Activist Campaigns Are Settled Before Anyone Knows They Started.

Introduction

In the first half of 2025, half of all settlements between activist investors and the companies they targeted were reached before a single public demand had been filed. The fight the financial press reported on was the minority of fights. The majority ended in a room you never heard about, before anyone had reason to write a headline.

This is worth stating plainly, because the standard account of how activist investing works runs in the opposite direction. The picture most observers carry is a specific one: a large fund builds a stake, writes a letter that names numbers and gives deadlines, puts the letter in public, and waits for management to react. That picture is not wrong. It describes something that happens. It describes an increasingly small fraction of what actually happens.

Campaigns Are Up. Proxy Fights Are Down.

In the first six months of 2026, activist investors launched 184 new campaigns globally, a record, 20% above the same period in 2025 and 38% above the five-year average. Full year 2025 ended with over 255 campaigns, up 40% from 2024. The year before that was the busiest since 2018. The trajectory is not ambiguous.

What is moving in the opposite direction is the proportion of those campaigns that end in a contested shareholder vote. In 2024, 76% of board seats won by activist investors globally came through negotiated settlements rather than proxy fights. Only 24% required a contested vote to resolve. The tool that defines the public image of activist investing, the proxy fight, the counted shareholder ballot, is the instrument being used less and less often even as activism itself accelerates.

The two trends coexist because a settlement does not mean a loss for the activist. It means the target looked at what was coming and calculated that negotiating the terms of the outcome was preferable to letting the outcome be decided in public. What it actually costs both sides to reach a contested vote, and how that count resolves when it happens, is worth understanding separately. What the settlement figure tells you is how often both parties conclude, independently, that the public route is the worse option for each of them.

What the Word “Passive” Is Actually Protecting

In 2024, US passive mutual funds and exchange-traded funds held more assets than active strategies for the first time in history. By the end of 2025, passively managed US assets stood at over $19.1 trillion, against $16.2 trillion held in active strategies. BlackRock, Vanguard, and State Street collectively manage over $30 trillion. They are together the largest single shareholder in approximately 88% of S&P 500 companies and cast roughly a quarter of all votes at those companies’ annual meetings.

The word “passive” in passive investing describes a strategy, meaning the fund tracks an index rather than selecting stocks. It does not describe how the fund behaves as a shareholder. A passive fund cannot sell the shares when it disagrees with management. The index holds the position whether the fund’s own managers approve of what the company is doing or not. This makes a passive fund a structurally committed voter: present at every meeting, on every question, because it has no mechanism to be anywhere else.

An activist who understands this is not trying to persuade a newspaper. He is trying to construct an argument that a firm managing ten or twelve trillion dollars in indexed assets finds credible enough to support when the ballot comes. That is a different task from writing a public letter. It requires a different kind of analysis, delivered through different channels, aimed at a different conception of who is actually making the decision. The letter to the press release was the tool of an era when the activists needed the newspaper to move the vote. They need it less now, because the vote is increasingly concentrated with people who do not read activist press releases. They read the analysis.

Challenging the Deal Before It Closes

The domain where this shift has been most consequential is mergers and acquisitions. Research from Columbia Business School, examining activist challenges mounted against acquirers after a deal is announced, found that 91% of unchallenged M&A transactions close. When an activist investor challenges a deal from the acquirer’s side, that figure falls to 53%. The difference between those two numbers is not explained by the size of the activist’s stake, or by the loudness of the campaign. It is explained by the analysis and who receives it.

M&A demands represented 35% of global activist campaign objectives in 2025, above the five-year average of 29%. In Europe, the figure reached 50% of campaign objectives for the year. The tactic runs across markets and deal sizes, and it does not require a proxy fight to be effective. An investor who can demonstrate, in a room rather than in a press release, that a proposed acquisition destroys value for the shareholders of the company spending the money has already done most of what needs to be done.

The James Hardie case illustrates what happens when a deal is structured to bypass the formal shareholder vote that would ordinarily serve as the accountability mechanism. James Hardie Industries, an ASX-listed, Ireland-incorporated building products company, announced in March 2025 that it would acquire the US-based AZEK Company for $8.75 billion in a combination of cash and shares. The share component amounted to approximately 35% of James Hardie’s issued capital. The deal was structured using an ASX listing rule exception, which meant James Hardie’s own shareholders would not vote on the transaction. AZEK’s shareholders voted to approve it in June 2025: 108.7 million votes in favor, 38,994 against. At James Hardie’s own annual general meeting in October 2025, investors used the instrument they still had. Approximately 67% of votes cast removed Chair Anne Lloyd from the board. The deal was already closed. The chair was not.

The James Hardie case is not about whether that particular acquisition was sound or unsound. It is about where accountability sits when the ordinary mechanism is unavailable, and what shareholders reach for when they find the expected door has been removed. They found another door. The full spectrum of tools available across a campaign, from capital return demands at the quieter end to full board replacement at the other, shows how that accountability gets applied at each level.

A Market the Standard Account Misses

Japan is now the second-largest activist market in the world. In 2025, it recorded 56 new activist campaigns, a record, and now accounts for almost half of all global activism conducted outside the United States. In the first half of 2024 alone, Japan saw 38 new campaigns, nearly triple the 14 it had seen in the same period of 2023. South Korea tracked 78 campaigns in 2024. Hong Kong logged 16, Singapore 15. Across Asia as a whole, more than 200 companies were targeted with activist demands in 2024, up from 134 in 2021.

Japan’s own domestic activists have become significant at the global level, not just regionally. The Murakami Funds ran eight campaigns in 2025, placing alongside Starboard Value as one of the three busiest activist funds in the world by campaign count. Tokyo-based Strategic Capital was the leading activist across Asia by both number of campaigns and rate of resolved public demands, across the fifteen months to Q1 2025. Non-local hedge funds accounted for 43% of activist activity in Japan in 2025.

The conditions that produced this were structural, not coincidental. Japan’s Corporate Governance Code, last revised in 2021, and sustained pressure from the Tokyo Stock Exchange on companies trading below book value created an environment where the tools of minority shareholder engagement began to work. Capital allocation demands, dividend increases and share buybacks, represented 50% of Japanese campaign demands in 2025. Operational and strategy demands reached 30%. The growth is not a single-year event that a shift in sentiment will reverse.

What was characterized for most of the last two decades as an Anglo-American practice, culturally resistant to transplant elsewhere, is now a standard instrument of minority shareholders operating across governance frameworks that historically offered them very little. The expansion has not produced a single unified playbook. The quiet approach, engagement before any announcement, analysis delivered through private channels, resolution before any public record exists, is as visible in Tokyo and Seoul as it is in London or Frankfurt.

What the Quiet Campaign Requires

In H1 2025, 42% of all activist funds waging campaigns were doing so for the first time. The population of activists has broadened considerably, across geographies and fund sizes, and first-time participants now represent a significant portion of all activity in any given period. The tool has outgrown the small set of well-known funds whose names became synonymous with it.

What has not changed is what the quiet approach actually requires to produce a result. A settlement reached before a public announcement is not a settlement reached from weakness on either side. It is reached because one party has completed an analysis the other cannot easily dismiss, and both parties have separately calculated that the cost of dismissing it in public exceeds the cost of addressing it privately. The company avoids the headline, the management distraction, and the volatility in its shareholder base. The activist secures the outcome. The shareholders whose interests were at stake receive neither the spectacle nor an explanation of what happened. They receive the result.

Conclusion

The description of activist investing as inherently short-term and destabilizing persists in part because the campaigns that make headlines are the campaigns that went loudest and ran longest. Those represent, by the numbers of the last several years, a minority of what actually occurred. The majority of campaigns have been resolved before they became campaigns in the sense that most observers would recognize. No letter. No proxy fight. No record of who moved first or what was said.

In the first half of 2025, half of all activist settlements happened before a single demand was made public. The shareholders who benefited from those settlements rarely learned that anyone had been acting on their behalf. That is what a campaign looks like when it works without the spectacle. It looks like nothing happened at all.