Shareholder Activism By Hedge Funds Motivations And Markets Perceptions Of Hedge Fund Interventions PDF Download
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| Author | : Mihaela Butu |
| Publisher | : Diplomica Verlag |
| Total Pages | : 61 |
| Release | : 2013 |
| Genre | : Business & Economics |
| ISBN | : 3842889143 |
Download Shareholder Activism by Hedge Funds: Motivations and Market's Perceptions of Hedge Fund Interventions Book in PDF, ePub and Kindle
In recent years, hedge funds' successful interventions in some large public companies have revealed their critical role in the corporate governance landscape in the United States and Europe. Due to public opinion, this new form of shareholder activism is accompanied by much polemic. This study examines the nature of hedge fund activism, the types of them, and the market’s perception of interventions in the United States. Starting with a distinction between shareholder activism by traditional institutions, and activism performed by hedge funds, the study elucidates why the latter may be more effective in monitoring management, and reduce agency costs. Analysing the Schedules 13D filed with the U.S. Securities and Exchange Commission, the study provides a classification of activists’ demands into ten distinct categories, arguing that hostile forms of activism are not central for hedge funds, and some more aggressive types of activism are possibly used as a negotiating tool to achieve the activist’s agenda. Using the event study methodology, the author estimates the stock returns around the announcement date. For a better understanding of hedge fund activism, and their demands on target companies, the reader will find two original Schedule 13D filings accompanied by letters to the management. Finally, the paper concludes on a view of the subject through the prism of the 2007/ 2008 financial crisis, outlining some trends in the aftermath of the financial market turmoil.
| Author | : Alon Brav |
| Publisher | : Now Publishers Inc |
| Total Pages | : 76 |
| Release | : 2010 |
| Genre | : Business & Economics |
| ISBN | : 1601983387 |
Download Hedge Fund Activism Book in PDF, ePub and Kindle
Hedge Fund Activism begins with a brief outline of the research literature and describes datasets on hedge fund activism.
| Author | : Dionysia Katelouzou |
| Publisher | : |
| Total Pages | : |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
Download Hedge Fund Activism, Corporate Governance and Corporate Law Book in PDF, ePub and Kindle
This study investigates the brand of shareholder activism hedge funds deploy by reference to a unique hand-collected dataset of 11 years' activist hedge funds' campaigns across 25 countries. The analysis has two core elements, one of which is to chart the emergence of hedge fund activism outside the United States and the other being to account why hedge fund activism has developed differently across the sample countries. Both issues have been to date only tangentially explored. This study is the first one to seek to determine the extent to which corporate law is a determinant of the hedge fund activism phenomenon using a fresh approach which combines theoretical and comparative legal analysis with empirical methods. While a single variable is unlikely to account for the emergence of hedge fund activism, the study describes hedge fund activism as a game of three sequential stages as a heuristic device and identifies market and legal parameters for each stage. To test the hypotheses advanced for the emergence of hedge fund the study draws upon the law and finance literature. For instance, to account to what extent the rights bestowed on shareholders by corporate law influence hedge fund activism the study uses the CBR shareholder rights index. The results indicate that the extent to which law matters depends on the stage which activism has reached. The study also puts hedge fund activism in its corporate governance context. Activist hedge funds' interventions have been envisioned as a mechanism for ensuring effective control of managerial discretion. Opponents of hedge fund activism contend, however, that this new breed of activists has a dark side that raises various concerns. Activist hedge funds have been considered: as exacerbating short-termism; as being mainly aggressive to the incumbents; as bearing similarities to the 1980s-raiders; and as engaging in distorting equity decoupling techniques. The study presents new empirical data that shows that the perceived negative side-effects of hedge funds activism are greatly exaggerated: they are myths. Cumulatively, these findings question whether hedge fund activism warrants any type of legislative response so far as the goal of shareholder value maximization is succeeded.
| Author | : William Bratton |
| Publisher | : OUP Oxford |
| Total Pages | : 924 |
| Release | : 2015-08-20 |
| Genre | : Law |
| ISBN | : 0191039799 |
Download Institutional Investor Activism Book in PDF, ePub and Kindle
The past two decades has witnessed unprecedented changes in the corporate governance landscape in Europe, the US and Asia. Across many countries, activist investors have pursued engagements with management of target companies. More recently, the role of the hostile activist shareholder has been taken up by a set of hedge funds. Hedge fund activism is characterized by mergers and corporate restructuring, replacement of management and board members, proxy voting, and lobbying of management. These investors target and research companies, take large positions in `their stock, criticize their business plans and governance practices, and confront their managers, demanding action enhancing shareholder value. This book analyses the impact of activists on the companies that they invest, the effects on shareholders and on activists funds themselves. Chapters examine such topic as investors' strategic approaches, the financial returns they produce, and the regulatory frameworks within which they operate. The chapters also provide historical context, both of activist investment and institutional shareholder passivity. The volume facilitates a comparison between the US and the EU, juxtaposing not only regulatory patterns but investment styles.
| Author | : John Buchanan |
| Publisher | : Cambridge University Press |
| Total Pages | : 389 |
| Release | : 2012-05-24 |
| Genre | : Business & Economics |
| ISBN | : 1107016835 |
Download Hedge Fund Activism in Japan Book in PDF, ePub and Kindle
Charts the rise and fall of confrontational hedge fund activism in Japan.
| Author | : Jayanthi Sunder |
| Publisher | : |
| Total Pages | : 42 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
Download Debtholder Responses to Shareholder Activism Book in PDF, ePub and Kindle
We investigate the effect of shareholder activism on debtholders by examining a sample of bank loans for firms targeted by activist hedge funds. We compare loan spreads before and after intervention and show the effects of heterogeneous shareholder actions. Spreads increase when shareholder activism relies on the market for corporate control or financial restructuring. In contrast, spreads decrease when activists address managerial entrenchment. Furthermore, the effects are more pronounced when pre-existing governance mechanisms are weak. Our findings suggest that shareholder activism does not necessarily exacerbate bondholder-shareholder conflicts of interest and highlight the role of activism in aligning investors.
| Author | : John C. Coffee |
| Publisher | : |
| Total Pages | : 108 |
| Release | : 2016-02-10 |
| Genre | : Corporate governance |
| ISBN | : 9781680830767 |
Download The Wolf at the Door Book in PDF, ePub and Kindle
The Wolf at the Door: The Impact of Hedge Fund Activism on Corporate Governance has three basic aims: to understand and explain the factors that have caused an explosion in hedge fund activism; to examine the impact of this activism; and to survey and evaluate possible legal interventions with an emphasis on the least restrictive alternative.
| Author | : Mark Mietzner |
| Publisher | : |
| Total Pages | : 47 |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
Download Hedge Funds versus Private Equity Funds as Shareholder Activists - Differences in Value Creation Book in PDF, ePub and Kindle
This paper analyzes market reactions triggered by announcements that hedge funds and private equity investors have purchased large blocks of voting rights. We argue that changes in shareholder wealth are related to the opportunity, possibility, and motivation of being an active blockholder who successfully reduces agency problems. We find positive abnormal returns following an announcement that an active shareholder has acquired at least 5% of a company's voting rights. Proxy variables for agency costs explain the market reaction only for investments of private equity funds. Considering the long-term stock price performance, we observe negative buy-and-hold abnormal returns especially for the hedge fund samples. We argue that this is because of the German corporate governance system, whereby hedge funds must align their interests with advisory board members. Therefore, we believe the distinct negative post-announcement stock performance of hedge fund targets may be a misinterpretation by the capital market of a hedge fund's abilities and motivations. It seems market participants do not believe hedge fund activism creates wealth effects in a manner comparable to private equity engagements.
| Author | : PhD Goodwin (Shane) |
| Publisher | : |
| Total Pages | : 288 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
Download Corporate Governance and Hedge Fund Activism Book in PDF, ePub and Kindle
Over the past two decades, hedge fund activism has emerged as a new mechanism of corporate governance that brings about operational, financial and governance reforms to a corporation. Many prominent business executives and legal scholars are convinced that the entire American economy will suffer unless hedge fund activism with its perceived short-termism agenda is significantly restricted. Shareholder activists and their proponents claim they function as a disciplinary mechanism to monitor management and are instrumental in mitigating the agency conflict between managers and shareholders. I find statistically meaningful empirical evidence to reject the anecdotal conventional wisdom that hedge fund activism is detrimental to the long term interests of companies and their long term shareholders. Moreover, my findings suggest that hedge funds generate substantial long term value for target firms and its long term shareholders when they function as a shareholder advocate to monitor management through active board engagement to reduce agency cost.
| Author | : J.B. Heaton |
| Publisher | : |
| Total Pages | : |
| Release | : 2020 |
| Genre | : |
| ISBN | : |
Download Hedge Fund Activism and Financial Performance Book in PDF, ePub and Kindle
Up to the late 1990s, there was little evidence that shareholder activism generated any economically meaningful improvements in share prices or the operating performance of corporations. By the early 2000s, however, a new form of shareholder activism began to emerge: shareholder activism by hedge funds. Hedge fund activism promised to be different and more effective than past efforts. As it turned out, however, the promise of hedge fund activism has been largely, though not entirely, unfulfilled. Hedge fund activists have influenced corporate managers to increase shareholder value, and in that sense they have succeeded where prior activists failed, doing more to compensate for a bridled market for corporate control than previous activism. But the success of hedge fund activists has been narrow; they seem to succeed only when they facilitate the sale of the target firm. The main focus of this chapter is to explore why hedge fund activism has been so limited in its successes. I conclude that there likely is no form of shareholder activism that will add real value for shareholders beyond facilitating the sale of the firm. The problem, in other words, is not with the nature of the activist. The problem is with the nature of corporations themselves and the limits of “outsideness.”
