BOSTON (Reuters) - Activist shareholders are likely to scale back campaigns in the coming weeks as target companies brace for a deep recession and their favorite calls for change - ranging from mergers to returning cash - are ignored during the coronavirus pandemic.

FILE PHOTO: The logo and trading information for Lazard Ltd appear on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2019. REUTERS/Brendan McDermid/File Photo

At year’s end there may be a rebound when activists ranging from Elliott Management to Third Point to Pershing Square Capital Management have capital to spend and companies need help to perform better, according to data released on Thursday by investment bank Lazard.

The year started on a strong note with firms committing billions to push for change at 42 companies in January and February. The pace fell 38% in March from February with only 16 campaigns launched.

As new campaigns nearly ground to a halt in March, the amount of money put to work was the smallest since 2016.

“We saw COVID-19’s impact on activism show up in March,” said Jim Rossman, who heads shareholder advisory at Lazard, referring to the respiratory disease caused by the virus.

“Lower M&A activity and companies focused on conserving cash will mean that activists are likely to increase their focus on operational performance and how management teams react to the crisis as the basis for new campaigns. But in a few months, activists who have been waiting on the sidelines could come back with a vengeance,” Rossman said in an interview.

Activists, who often call on target companies to sell themselves or spin off units, pulled back last month, and of the 16 campaigns launched in March, only five had an M&A component, Lazard said.

Similarly companies now worry about conserving cash and 123 U.S. companies ranging from Hilton Worldwide HLT.N to Home Depot HD.N have suspended or cut back share buyback programs as management braces for the worst downturn since the Great Depression of the 1930s.

Such requests would likely fall on deaf ears now for activists used to pressing for buybacks. Only one campaign launched in the first quarter included a request for the return of capital, Lazard said.

Many activists are careful to avoid looking overly aggressive during the pandemic, Rossman said, noting they do not want to offend other investors whose help they might need in pushing their case later.

Looking ahead, however, Rossman said activists are already looking for businesses that are generally sound but have been battered by the pandemic and need to adjust cost structures and supply chains.

“At that point M&A will make a comeback as a theme,” he said.