Gone Global: The International Diffusion of Hedge Fund Activism

Abstract

After decades of being primarily a US-based phenomenon, the globalization of hedge fund (HF) activism is increasing at an unprecedented speed. In this chapter, we provide an overview of the current knowledge on HF activism by systematically comparing the phenomenon in the US and outside the US context. We conduct a comprehensive review of the empirical research on HF activism by mapping out and assessing the nascent body of work within four research sub-streams: the antecedents of HF activism; HF activists’ tactics; the responses of target firms to HF activist campaigns, and the outcomes of the latter for HF activists, target firms, and other stakeholders. We then illustrate the cross-country differences in hedge fund activist practices outlined in the literature review through six select cases of interventions by a prominent HF activist. We conclude by outlining current research gaps and formulating research questions that could advance our knowledge on hedge fund activism in a global context.

Keywords: Shareholder activism, hedge funds, hedge fund activism, literature review, corporate governance