Download This PaperInstitutional Trading Around M&A Announcements *
Forthcoming: Financial Management
69 Pages Posted: 20 Dec 2018 Last revised: 8 Aug 2023
Date Written: July 23, 2024
Abstract
We contrast the investment strategies of hedge funds and mutual funds around M&A transactions. We find that hedge funds, on average, increase their holdings of soon-to-be takeover targets by 7.5% during the quarter before M&A announcements. Conversely, mutual funds, on average, reduce their equity holdings in impending targets by 3.0% over the same time period, although the reduction is less pronounced for more actively managed funds. Our results suggest that hedge funds and more active mutual funds enjoy superior access to private information or possess superior ability to process public information related to M&A transactions.
Keywords: Mergers and Acquisitions, Investment strategies, Hedge funds, Mutual funds, SEC download activity. JEL Codes: G11, G23, G34
JEL Classification: G14, G23, G24, G34
Suggested Citation: Suggested Citation
Fich, Eliezer M. and Lantushenko, Viktoriya and Sialm, Clemens, Institutional Trading Around M&A Announcements * (July 23, 2024). Forthcoming: Financial Management, Available at SSRN: https://ssrn.com/abstract=3297800 or http://dx.doi.org/10.2139/ssrn.3297800
Clemens Sialm (Contact Author)
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