Hedge Funds and Activists: Positioning and Campaigns — 2026-09-12

Top developments

Japan’s LDP Proposes Abolishing 300-Vote Threshold for Shareholder Proposals

In a significant move reported on September 10, 2026, Japan’s ruling Liberal Democratic Party (LDP) has proposed abolishing the requirement that shareholders must hold at least 300 voting rights to submit proposals to general meetings, suggesting a shift to a 1% ownership threshold. This proposal aims to lower barriers for minority shareholders and activists to influence corporate governance. Environmental groups have strongly opposed the change, arguing it could weaken checks on large corporations by allowing frivolous or hostile proposals to bypass traditional scrutiny.

South Korea Implements Mandatory Cumulative Voting for Large Listed Companies

Effective September 10, 2026, South Korea’s amended Commercial Code prohibits listed companies with total assets exceeding 2 trillion KRW from excluding cumulative voting from their articles of incorporation. This change empowers minority shareholders to concentrate their votes on specific board candidates, significantly altering board composition dynamics for major conglomerates. Companies are currently adjusting their board nomination strategies and director terms in anticipation of this new governance landscape.

SEC Subpoenas Wall Street Banks in Situational Awareness Hedge Fund Probe

The U.S. Securities and Exchange Commission (SEC) has sent subpoenas to several major Wall Street banks seeking information about trading activities related to Situational Awareness, an AI-focused hedge fund that recently faced a near-implosion. The investigation, which gained momentum in late August but continues to generate new procedural developments, focuses on potential misconduct or irregularities in the fund's collapse. This marks one of the most high-profile regulatory interventions into the AI-hedge fund sector this year.

Korean Activist Fund Align Partners Emphasizes Corporate Change Over Proxy Battles

Lee Chang-hwan, CEO of Korean activist fund Align Partners, stated in an interview published on September 6, 2026, that "corporate transformation is more important than proxy fights." This reflects a strategic pivot among some Korean activists towards engaging with management on value-up programs rather than solely pursuing adversarial board seats. The commentary highlights the maturing of the Korean activist landscape beyond the "foreign vulture" stereotype.

Local view

Japan: Diamond Online reports that the LDP's proposal to lower the threshold for shareholder proposals has sparked fierce backlash from environmental groups who fear it will undermine stable corporate governance by enabling aggressive activist tactics without sufficient ownership stakes.

South Korea: Yonhap News highlights that major conglomerates are scrambling to adjust their director nomination processes ahead of the September 10 implementation of mandatory cumulative voting, anticipating increased influence from minority shareholders in board elections.

Context & numbers

• Japan Shareholder Proposals: Activist proposals in Japan increased by 20% globally in the first half of 2026, prompting rule adjustments in various countries, including Japan's current debate on proposal thresholds.
• Korea Asset Threshold: The new cumulative voting mandate applies to listed companies with total assets over 2 trillion KRW (~$1.5 billion USD), covering most major chaebols.

On the radar

• Upcoming Korean AGMs: With cumulative voting now active for large firms, watch for early signs of minority shareholder coalitions forming for the next annual general meeting season.
• Japan Regulatory Response: Monitor whether environmental groups' opposition to the 300-vote threshold abolition leads to a compromise in the final legislative text.
• Situational Awareness Fallout: Further details from bank responses to SEC subpoenas may reveal broader implications for prime brokerage relationships with AI-focused hedge funds.