The world's biggest fund managers are giving shareholderactivists the muscle to take on larger companies from Dell Inc. toMicrosoft Corp.

“They're able to go after big companies because they are veryeffectively communicating with large institutional stockholders,”said Scott A. Barshay, a partner at the law firm Cravath, Swaine& Moore LLP, at the annual Bloomberg Markets 50 Summit in NewYork today. “That's a very new phenomena.”

Activist investors, who typically take small stakes in companiesand lobby for higher dividends, stock buybacks or managementchanges, have also recently targeted Apple Inc., Yahoo! Inc. andChesapeake Energy Corp. with their campaigns. The activist fundsare increasing in size, and large mutual funds have shown anincreased willingness to back shareholder proposals.