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Activist investors have ramped up demands for operational fixes, refreshed boards and sales of lacklustre businesses in the past few months of 2020, a rush that will continue into the new year, bankers, investors and others said.

Investors such as Paul Singer’s Elliott Management and William Ackman’s Pershing Square Capital Management paused earlier in the year when the coronavirus pandemic first disrupted supply chains, displaced work forces and made it harder to conduct due diligence.

But in the last quarter of 2020, activist hedge funds have targeted 41 companies, nearly doubling campaigns from the third quarter, data from investment bank Lazard Ltd. show.

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“The fourth-quarter snapback is definitely happening,” said Jim Rossman, who heads shareholder advisory at Lazard, adding, “Activism is coming back full steam and the first quarter of 2021 is going to be very busy.”

The recent rollout of coronavirus vaccines and a strong stock market recovery have emboldened rabble-rousing investors to take on new targets.

A stronger performance among individual activists may also be fueling the pace: They are up, on average, 6.7 per cent through November, after a 27-per-cent drop in the first quarter, according to Hedge Fund Research. That compares with a 14-per-cent gain for the U.S. benchmark S&P 500 index this year.

“There is certainly money out there for activism,” said Ken Squire, who runs research firm 13D Monitor and the 13D Activist Fund, which is up 18 per cent through the middle of November.

In recent weeks, new investment firm Engine No. 1 took on Exxon Mobil Corp., Elliott Management nominated directors at Public Storage, Starboard Value settled for seats at ON Semiconductor Corp. and Sachem Head Capital Management won seats at Elanco Animal Health Inc.

The 41 campaigns launched so far in the fourth quarter compare with 46 in the same period last year, and 24 in the prior quarter, according to Lazard data. Year to date, activity is down roughly 20 per cent.

After a year of wild and unexpected business conditions, activists are almost certainly going to target companies where they see benefits to cost-cutting, spinoffs, mergers or better corporate governance, sources said.

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“No one is going to give companies a free pass because of COVID,” said Scott Winter, managing director at Innisfree M&A who tallies shareholder votes on hotly contested corporate matters.

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