Hedge Fund Activism: A Review

Foundations and Trends in Finance, Vol. 4, No. 3, pp. 1-66, February 2010

64 Pages Posted: 22 Oct 2011

See all articles by Wei Jiang

Wei Jiang

Columbia Business School - Finance and Economics; ECGI; NBER

Hyunseob Kim

Cornell University - Samuel Curtis Johnson Graduate School of Management

Alon Brav

Duke University - Fuqua School of Business; European Corporate Governance Institute (ECGI); National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: 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.

Suggested Citation

Jiang, Wei and Kim, Hyunseob and Brav, Alon, Hedge Fund Activism: A Review (2010). Foundations and Trends in Finance, Vol. 4, No. 3, pp. 1-66, February 2010. Available at SSRN: https://ssrn.com/abstract=1947049

Wei Jiang (Contact Author)

Columbia Business School - Finance and Economics ( email )

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ECGI ( email )

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NBER ( email )

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Hyunseob Kim

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

Ithaca, NY 14853
United States

Alon Brav

Duke University - Fuqua School of Business ( email )

100 Fuqua Drive
Durham, NC 27708-0120
United States
919-660-2908 (Phone)
919-684-2818 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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