Hedge Funds and Activists: Positioning and Campaigns — 2026-09-11

Top developments

Citadel Leads H1 Performance as Peers Slip in August

Citadel followed a record-breaking July with a 0.1% gain in August, bringing its 2026 year-to-date returns to 12.1%. In contrast, Millennium lost 2.1% in July, pulling its 2026 returns to 8.2%, while Point72 was down 3.3% in July. This divergence highlights the volatility in multistrategy funds during the mid-year period, with Citadel maintaining its lead among major firms

South Korea Implements Mandatory Cumulative Voting

South Korea began enforcing mandatory cumulative voting for large listed companies on September 10, 2026. This change significantly empowers minority shareholders to influence board composition, making the 2027 shareholder meetings a critical battleground for activist funds seeking to place directors. The corporate sector is closely watching how this new rule will impact director elections and shareholder support dynamics

Japanese Activists Use Legal Tactics to Neutralize Cross-Shareholdings

In June 2026, Japanese activist funds employed tactics under Article 160 of the Companies Act to neutralize voting rights of parent companies and policy-holding shareholders. Strategic Capital utilized these provisions to exclude specific shareholders from voting on certain proposals, such as share buybacks targeting those same entities. This "vote nullification" strategy has become a prominent tool against entrenched cross-shareholding structures

SEC Scrutinizes Situational Awareness Hedge Fund Collapse

The SEC has issued subpoenas to major Wall Street banks regarding the trading activities of the AI-focused hedge fund Situational Awareness, which recently faced a near-implosion. Regulators are investigating potential irregularities in trading and positioning, signaling increased scrutiny on AI-centric funds that have driven significant market movements in 2026

Local view

Japan: The Liberal Democratic Party (LDP) has proposed abolishing the "300 votes" requirement for shareholder proposals, replacing it with a unified 1% ownership threshold. Environmental groups and legal experts argue this change could weaken checks on large corporations and facilitate hostile takeovers or wolf-pack activism, sparking intense debate over the balance between shareholder rights and corporate stability

South Korea: Foreign activist funds are increasingly targeting the Korean market, driven by expectations of resolving the "Korea Discount." Local media highlights that while foreign capital sees opportunity in governance reforms, domestic stakeholders are wary of short-termism. The implementation of cumulative voting is seen as a structural shift that may force companies to engage more seriously with minority shareholders

Context & numbers

• Citadel YTD Return: 12.1% (as of August 2026)
• Millennium YTD Return: 8.2% (after July loss of 2.1%)
• Point72 YTD Return: Down 3.3% in July; previous H1 return was 14.5%
• Japan Shareholder Proposals: Activist proposals increased by 20% globally in H1 2026, with over 50 Japanese companies facing activist-led proposals in the June general meetings

On the radar

• Upcoming Proxy Contests: The Activist Investor tracker lists five pending proxy contests scheduled for 2026 and 2027, indicating continued campaign momentum into the next fiscal year
• Korea’s 2027 AGM Season: With mandatory cumulative voting now in effect, the first full cycle of board elections under the new rules will occur in early 2027, likely triggering early activist positioning and stake-building in late 2026