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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

Alon Brav

Duke University - Fuqua School of Business

Wei Jiang

Columbia Business School - Finance and Economics

Hyunseob Kim

Cornell University - Samuel Curtis Johnson Graduate School of Management

Multiple version iconThere are 3 versions of this paper

Date Written: February 12, 2010

Abstract

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

Brav, Alon and Jiang, Wei and Kim, Hyunseob, Hedge Fund Activism: A Review (February 12, 2010). Foundations and Trends in Finance, Vol. 4, No. 3, 2009. Available at SSRN: https://ssrn.com/abstract=1551953

Alon Brav

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 (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States
(212) 854-5553 (Phone)

Hyunseob Kim

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

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