Investors are out of love with conglomerates, and understandably so: for outsiders, there is often no logic to the combination of businesses that have been tacked together over time. Organizations become top heavy because complex and costly hierarchies evolve to manage the structure, and the true value of the bestperforming divisions is hidden. As a result, the shares underperform.

Activist investors have naturally stepped into this space, calling on boards to focus on fewer core activities, with clear lines of accountability, to improve performance and boost returns. Notable examples are Nelson Peltz of Trian calling for a simpler operating model at Procter & Gamble, and Dan Loeb pushing for change at Nestlé.