Shareholder activism is continuing to shake up Wall Street. Not only in terms of an increasing number of activist campaigns against lager and larger corporate targets, and not only in terms of their increased success rate both in negotiations and through the proxy, but also in the sense of changing things in the entrenched culture of the financial sector.

One case in point is highlighted by an August 9th article in the Wall Street Journal highlighting the new trend of big mutual funds working together with shareholder activists in their campaigns.

activists Mutual Funds

Mutual funds no longer reliably “management friendly”

The winds of change are blowing. Until the last few years, large mutual funds were considered friends of management who purchase shares in a company because they like what management is currently doing. A few years ago mutual fund managers would rarely even talk to activists looking to challenge the status quo, according to activists and financial sector insiders.

That has completely changed today, with mutual funds often siding with activists in their campaigns. WSJ sources note that mutual funds have backed some of the most prominent activist campaigns, including Starboard Value‘s replacing the board at Darden Restaurants last year and the campaign at GM earlier this year for a quicker share buyback.

A recent survey of more than 350 mutual-fund managers by Rivel Research Group revealed that half of the managers had been contacted by an activist in the past 12 months, and 45% who had been contacted wen on to support the campaign.

“In contrast to the situation of just a few years ago, companies must examine their long-only shareholders with a critical eye,” J.P. Morgan wrote to clients earlier this spring. “There are no ‘management friendly’ investors.”

Changing the playing field

This new attitude by mutual funds is changing the way campaigns play out. Instead of just facing one activist, company execs are now often forced to deal with pressures from several major shareholders. Not surprisingly, firms are becoming more receptive to activists and their requests, including share buybacks, reductions costs and asset sales.

Based on data from FactSet, activist campaigns in 2014 led to the gain of board seats at a record 107 companies, 91 of the seats through pacts negotiated with the companies rather than proxy votes. 2015 is also off to a fast start, with activists already picking up board seats at 86 firms in the first six months of the year.