Abstract

http://ssrn.com/abstract=1316408
 
 

Citations



 


 



The Returns to Hedge Fund Activism


Alon Brav


Duke University - Fuqua School of Business

Wei Jiang


Columbia Business School - Finance and Economics

Frank Partnoy


University of San Diego School of Law

Randall S. Thomas


Vanderbilt University - Law School; European Corporate Governance Institute (ECGI)


Financial Analysts Journal, Vol. 64, No. 6, 2008
San Diego Legal Studies Paper No. 09-002

Abstract:     
Hedge fund activism is a new form of investment strategy. Using a large hand-collected dataset from 2001 to 2006, we find that activist hedge funds in the United States propose strategic, operational, and financial remedies and attain success or partial success in two-thirds of the cases. The abnormal stock return upon announcement of activism is approximately 7 percent, with no reversal during the subsequent year. Target firms experience increases in payout and operating performance and higher CEO turnover after activism. We find large positive abnormal return to hedge fund activists, which is higher than the return to other equity-oriented hedge funds.

Keywords: Alternative Investments - Hedge Fund Strategies, Portfolio Management - Hedge Fund Strategies, Corporate Governance

Accepted Paper Series


Not Available For Download

Date posted: December 17, 2008  

Suggested Citation

Brav, Alon and Jiang, Wei and Partnoy, Frank and Thomas, Randall S., The Returns to Hedge Fund Activism. Financial Analysts Journal, Vol. 64, No. 6, 2008; San Diego Legal Studies Paper No. 09-002. Available at SSRN: http://ssrn.com/abstract=1316408

Contact Information

Alon Brav (Contact Author)
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
919-660-2908 (Phone)
919-684-2818 (Fax)
Wei Jiang
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States
(212) 854-5553 (Phone)

Frank Partnoy
University of San Diego School of Law ( email )
5998 Alcala Park
San Diego, CA 92110-2492
United States
619-260-2352 (Phone)
619-260-4180 (Fax)
Randall S. Thomas
Vanderbilt University - Law School ( email )
131 21st Avenue South
Nashville, TN 37203-1181
United States
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
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