47 Pages Posted: 9 Jun 2010
Date Written: May 26, 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.
Keywords: Shareholder Activism, Hedge Funds, Active Ownership, Institutional Investors
JEL Classification: G32
Suggested Citation: Suggested Citation
Becht, Marco and Franks, Julian R. and Grant, Jeremy, Hedge Fund Activism in Europe (May 26, 2010). ECGI - Finance Working Paper No. 283/2010. Available at SSRN: https://ssrn.com/abstract=1616340 or http://dx.doi.org/10.2139/ssrn.1616340