Hedge Fund Activism: A Review
Foundations and Trends in Finance, Vol. 4, No. 3, 2009
64 Pages Posted: 12 Feb 2010 Last revised: 25 Jul 2011
Date Written: February 12, 2010
This article reviews shareholder activism by hedge funds. We first describe the nature and characteristics of hedge fund activism, including the objectives, tactics, and choices of target companies. We then analyze possible value creation brought about by activist hedge funds, both for shareholders in the target companies and for investors in the hedge funds. The evidence generally supports the view that hedge fund activism creates value for shareholders by effectively influencing the governance, capital structure decisions, and operating performance of target firms.
Keywords: Hedge Fund, Shareholder Activism, Corporate Governance
JEL Classification: G30, G32
Suggested Citation: Suggested Citation