Hedge Fund Activism in Europe
Solvay Brussels School of Economics and Management (ULB); European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)
Julian R. Franks
London Business School; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)
University of Cambridge
May 26, 2010
ECGI - Finance Working Paper No. 283/2010
The paper analyzes 362 European activist interventions by hedge funds, focus funds and other activist investors from 2000 to 2008. The sample includes both public and private interventions. The private interventions are based upon proprietary data collected from five activist funds. For public interventions the disclosure of acquired stakes is associated with large positive abnormal returns across a number of jurisdictions. Private activism is extensive and profitable but less so than public activism, in large part because the incidence of takeovers is higher in public activism. The returns from hostile activist interventions are more profitable than co-operative ones, and returns for specialist activist funds are substantially larger than for other investors. After controlling for these factors legal jurisdiction does not explain differences in returns across countries.
Number of Pages in PDF File: 47
Keywords: Shareholder Activism, Hedge Funds, Active Ownership, Institutional Investors
JEL Classification: G32
Date posted: June 9, 2010
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