Brace Yourself: Activist Investors Are Coming for You in 2025 

As we look ahead to 2025, activist investors are sharpening their focus on companies navigating an increasingly dynamic and volatile market. These investors are calling for bold actions—removing CEOS and Board members, streamlining operations, pursuing structural changes and unlocking new avenues of value creation—to capitalize on a shifting economic and political landscape. Companies must critically evaluate readiness to defend against these campaigns or risk losing control of their corporate narrative and financial communications strategy. 

The stakes are high, and no company is immune. Activists are setting their sights on industries with strong growth potential and operational inefficiencies, targeting even well-managed companies with undervalued stocks. A company’s ability to respond decisively and communicate effectively with shareholders may determine whether it emerges stronger—or becomes another casualty of activist pressures. 

The Activist Investor Landscape

The rise in activist investor campaigns over the last few years is striking. According to a recent Barclays report, over 240 activist campaigns were launched globally in 2024, the highest total since 2018. This trend is expected to continue into 2025, with activist hedge funds likely to target a range of industries, in particular technology, health care, financial services, energy and consumer goods. These sectors are attractive due to their high growth potential, significant cash reserves and expected opportunities for operational improvement. Even well-managed companies with strong financials can become targets if their stock is undervalued, making them appealing to activists looking to unlock shareholder value through strategic changes. 

The impact of activist campaigns and the increasingly tumultuous market has been profound, with CEO turnover reaching record levels. In 2024 alone, more than 27 CEOs resigned at the hands of activist investor pressure. High-profile activist campaigns have resulted in leadership changes at major companies, including Starbucks, Masimo, Gildan, Amarin, Sensata and Twilio. These changes underscore the significant influence activists can and will exert on leaders perceived not to be capitalizing on opportunities to maximize shareholder value.  

Why Activist Hedge Funds Favor a Trump Presidency

In short, investors are bullish, driven by expectations of more mergers and acquisitions, tax and regulatory easing and rapid technological innovation driven by AI. The return of Donald Trump to the White House has unleashed a business-friendly agenda that aimed to reduce compliance burdens, increase operational flexibility and boost corporate profits. Activists are energized by this environment, ready to capitalize on opportunities created by lower valuations, volatile markets and favorable regulatory conditions. 

Key regulatory appointments signal a more lenient environment for mergers and acquisitions. Andrew Ferguson, nominated as chair of the Federal Trade Commission, is expected to ease antitrust scrutiny. Securities Exchange Commission chair nominee Paul Atkins, a champion of deregulation, is likely to reduce compliance costs further. Meanwhile, Gail Slater, slated to lead the Department of Justice’s Antitrust Division, may prioritize large tech companies, potentially relieving other industries of significant scrutiny. Analysts project that declining interest rates and stabilizing inflation could drive a 10% to 15% increase in U.S. M&A activity in 2025, amplifying pressure on corporate leaders to simplify operations, consolidate and capture shareholder value. 

What It Takes to Be Activist Ready

What companies need to recognize is that a new wave of investor activism also comes with an updated media playbook that has taken a page from our politics, with podcasts, surrogates and digital ads to set the agenda. To defend against the threat of an activist campaign, companies should focus on proactive messaging and communication with shareholders well before any activist approaches. Engaging with shareholders, understanding their concerns and preparing the board for potential alternative solutions are all crucial. Companies must regularly assess their value and be prepared for activist approaches, ensuring they have a clear view of their worth and are ready to engage proactively. A deep understanding of shareholder interests and concerns is essential to effectively address their expectations and mitigate potential conflicts. This understanding allows companies to tailor their strategies and communications, fostering stronger relationships and trust with their shareholders. 

Proactive shareholder and stakeholder engagement is essential. Companies should solidify allies within their investor base and broader stakeholder community, including employees, unions, customers and regulators. Building strong internal communications and maintaining positive labor relations can help mitigate the impact of activist campaigns. By fostering a supportive network of stakeholders, companies can create a robust defense against activist pressures. 

APCO emphasizes the importance of conducting perception audits to uncover stakeholder priorities and inform C-Suite decision-making and messaging. Leveraging predictive monitoring tools to identify emerging risks and issues, including digital fingerprints of early activist activity, can help companies stay ahead of potential threats. Scenario planning and response strategies are critical for portraying confidence to investors and maintaining control during activist engagements. 

Navigating the Rocky Road Ahead

The anticipated market volatility of 2025 presents both risks and opportunities. Emerging political and economic conditions have heightened the threat posed by activist campaigns, which can put unprepared companies at significant risk. However, with the right proactive preparation, these pressures can also catalyze positive change, driving companies to rethink strategies and unlock untapped potential. For the C-Suite, this moment offers a chance to capitalize on a strong economy and anticipated growth while defending against those seeking to dictate the corporate agenda. 

To seize these opportunities and safeguard their future, companies must critically evaluate their readiness for activist investors. This involves assessing vulnerabilities, preparing for engagement and aligning with shareholder expectations. By consistently communicating their growth story and corporate narrative—not just during earnings reports but throughout the year—companies can build stronger relationships with shareholders and position themselves for long-term success. The time to act is now.