How Does Past Experience Impact Hedge Fund Activism?
46 Pages Posted: 6 Feb 2016 Last revised: 20 Mar 2019
Date Written: January 3, 2019
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: Suggested Citation