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(Bloomberg) -- U.K. companies are more likely to be targeted by activist investors than those in Germany, France, Scandinavia and Switzerland, according to Alvarez & Marsal Inc.

Activism is on the rise across Europe amid economic uncertainty, technological disruption and regulatory change, but Britain is a particular target because of investors’ faith in the nation’s legal and corporate-governance structures, the restructuring consultant said after analyzing 1,170 firms. Almost half of the 111 companies at risk this year or next are U.K.-based, it said.

“Activist approaches are growing in frequency in Europe and they should no longer be regarded as a black swan event,” said Malcolm McKenzie, a managing director at Alvarez & Marsal in London. “Boards need to anticipate these scenarios, prepare and take pre-emptive action.”

Most exposed are the consumer, industrials and particularly the materials sector, according to the consultancy.

Typical targets of activist investors are companies that have suffered declines in their share price, return on equity, earnings or cash generation, or those with rising expenses, according to Alvarez & Marsal’s report. While activists have traditionally struck after about two years of a company’s problems starting, that time frame is shortening, the consultancy said.

It’s not necessarily a bad thing. Traditional investors such as mutual and pension funds are embracing activists’ approaches as they seek ways to boost shareholder value, JPMorgan Chase & Co. said in a report this month.

“Activist shareholders have often been perceived as the wolves at the door -- this is becoming increasingly outdated,” said Alvarez & Marsal’s McKenzie. “There is an ever-greater willingness in Europe for institutional shareholders to listen to an activist’s observations on how performance and share price can be improved.”

“Activists don’t target bad companies,” he said. “They like good companies that could be doing better.”

To contact the reporters on this story: Manuel Baigorri in London at mbaigorri@bloomberg.net, Nishant Kumar in London at nkumar173@bloomberg.net.

To contact the editors responsible for this story: Aaron Kirchfeld at akirchfeld@bloomberg.net, Neil Callanan at ncallanan@bloomberg.net, Paul Armstrong

©2017 Bloomberg L.P.

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