How Does Past Experience Impact Hedge Fund Activism?

46 Pages Posted: 6 Feb 2016 Last revised: 20 Mar 2019

See all articles by Nicole M. Boyson

Nicole M. Boyson

Northeastern University - D’Amore-McKim School of Business

Linlin Ma

Peking University HSBC Business School

Robert M. Mooradian

Northeastern University, D’Amore-McKim School of Business, Finance Area

Date Written: January 3, 2019

Abstract

Hedge fund activists with financial expertise from private equity or special situation funds conduct more campaigns, encounter less target resistance, induce management turnover, obtain board representation, and achieve higher merger completion rates compared to activists without such expertise. General financial expertise gained at investment banks also facilitates success: targets of activists with either type of financial expertise have better stock price reactions to activism and higher long-term operating performance than targets of activists without this expertise. The most successful activists are those with both prior financial expertise and significant on-the-job activism experience.

Keywords: Hedge fund activism, Manager skill, Managerial Experience

JEL Classification: G30, G32, G34

Suggested Citation

Boyson, Nicole M. and Ma, Linlin and Mooradian, Robert M., How Does Past Experience Impact Hedge Fund Activism? (January 3, 2019). Northeastern U. D’Amore-McKim School of Business Research Paper No. 2727371. Available at SSRN: https://ssrn.com/abstract=2727371 or http://dx.doi.org/10.2139/ssrn.2727371

Nicole M. Boyson (Contact Author)

Northeastern University - D’Amore-McKim School of Business ( email )

360 Huntington Ave.
Boston, MA 02115
617-373-4775 (Phone)

Linlin Ma

Peking University HSBC Business School ( email )

Robert M. Mooradian

Northeastern University, D’Amore-McKim School of Business, Finance Area ( email )

Boston, MA 02115
United States
617-373-5955 (Phone)
617-373-8798 (Fax)

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