Activist shareholders play a central role in moderns corporations. Such blockholders range from investors who actively jawbone or break up firms, to index funds that are largely passive in that they limit themselves to voting. Crucially, in between is a group of hedge funds that have embraced activism as a business strategy in the last decades. Campaigns involving these highly strategic and trading-intensive blockholders have become ubiquitous, often featuring a “lead investor” supported by group of “follower funds”, all with stakes that, individually, are not enough to control targets. This phenomenon—termed “wolf pack activism”—has received considerable attention by practitioners, policymakers and academics, both due to its importance and its rather secretive nature. In fact, while the current regulation in the U.S. permits some degree of communication among blockholders, there are substantial costs for activists who are perceived as acting as a formal group. A fundamental question then arises, one that goes beyond hedge funds: how do leader blockholders gear up to intervene in firms in settings when (i) other investors think alike and can be influenced, but (ii) explicit agreements are not possible?

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