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
Date Written: 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.
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