Hedge funds Elliott Investment Management, ValueAct Capital, Jana Partners and others urged target companies to merge, split off units or sell themselves, with these demands show up in 49% of all campaigns last year. In the previous four years, mergers and acquisitions requests averaged 42%, the data show.

"The activists told corporations that this is the new reality and it is time to move on," said Jim Rossman, global head of shareholder advisory at Barclays.

But their requests came during a year takeover activity dropped to its lowest level in a decade, according to Dealogic data, leaving many with little to show for their calls.

As total deal volume fell 18% to about $3 trillion, senior dealmakers described the year as one of the toughest in recent memory. Deals weren't getting done because potential partners couldn't agree on price and it was tougher to secure financing as interest rates rose.

Still many seasoned activists summoned the self-confidence to make demands to corporate management even if they knew it would take longer than usual to get to the finish line, several fund managers and bankers said.

Elliott, one of the industry's busiest activists, called on wireless tower owner Crown Castle to consider selling the business while Jana Partners pushed Frontier Communications to launch a sales process and ValueAct pressed Seven & i Holdings to spin off its 7-Eleven convenience store chain. Irenic Capital Management and Starboard suggested News Corp spin off its digital real estate division.

While they might have to wait longer for a proposed outcome, activists described their demands last year when market conditions allowed them to build positions for less money.

"Activists saw an opportunity to invest at really attractive points where markets featured depressed valuations," Rossman said, explaining why activism remained very strong last year with 229 new campaigns around the world after 235 campaigns in 2022.

Besides M&A, activists also asked for board changes, changes in strategy and operations and improved governance.

Changes in management, where activists call for top executives to be replaced, were last on the list of demands last year, showing up in only 10% of all campaigns, the data show. In 2022 there had been a 46% year-on-year increase in activists targeting a company's top brass, research firm Insightia found.

(Reporting by Svea Herbst-Bayliss; Editing by Aurora Ellis)

By Svea Herbst-Bayliss