The Attention of Long‐Term Institutional Investors and Timely Loss Recognition

2021 ◽  
Author(s):  
Rui Wang
Keyword(s):  
Institutional Investors ◽  
Timely Loss Recognition

scholarly journals Institutional Investors and Hedge Fund Activism

2020 ◽  
Author(s):  
Simi Kedia ◽  
Laura Starks ◽  
Xianjue Wang
Keyword(s):  
Stock Returns ◽  
Institutional Investors ◽  
Operating Performance ◽  
Hedge Fund ◽  
Target Firms ◽  
Hedge Fund Activism ◽  
Institutional Shareholders

Abstract Hedge fund activists have ambiguous relationships with the institutional shareholders in their target firms. While some support their activities, others counter their actions. Due to their relatively small holdings in target firms, activists typically need the cooperation of other institutional shareholders that are willing to influence the activists’ campaign success. We find the presence of “activism-friendly” institutions as owners is associated with an increased probability of being a target, higher long-term stock returns, and higher operating performance. Overall, we provide evidence suggesting the composition of a firm’s ownership has significant effects on hedge fund activists’ decisions and outcomes.

scholarly journals INVESTMENT STRATEGIES OF INSTITUTIONAL INVESTORS: SOVEREIGN WEALTH FUNDS VS ENDOWMENTS

2013 ◽  
pp. 117-126
Author(s):  
E. S. Biryukov
Keyword(s):  
Real Estate ◽  
Hedge Funds ◽  
Institutional Investors ◽  
Private Equity ◽  
Investment Strategy ◽  
High Yield ◽  
Income Volatility ◽  
Sovereign Wealth Funds ◽  
The World

The paper considers two main original approaches to investing the assets of institutional investors (the total amount of their assets in the world is about 100 trillion dollars) – the one of Norway's sovereign wealth fund Global and approach of Yale's endowment fund. Fund Global with assets of $ 716 billion dollars is the largest institutional investor in the world, its strategy is based on the assumption that markets are efficient and their long-term growth lies in the balance of investment in stocks , bonds, and , since more recent time - in real estate. Financiers of Yale in the 1990s revolutionized the approach to investment, firstly, by reducing the proportion of stocks and bonds in favor of private equity and real estate, and secondly , by shift from investments in the domestic market to foreign markets. Not all institutional investors are ready to follow these strategies because of the risk of negative returns in times of crises, but in the medium- and long-term, these approaches allow to beat inflation. For example, Yale's endowment has grown since 1985 to 2012 from 1.6 to 19 billion dollars, and high yield allows to transmit 1 billion dollars (!) to the budget of the university annually. Endowment funds are one of the key sources of revenues of leading American universities. Analysis of the investment policy of endowment funds and sovereign wealth funds shows that fundamental changes in the concept of investing began to occur since the late 1980s - early 1990s . Institutional investors of both these types ceased to focus on conservative instruments - bonds and deposits , and use other options: Global - stocks , Yale – private equity , hedge funds, real estate investments , etc. With the expand of the spectrum of instruments in which the funds are invested the income volatility increases either, and therefore the institutional investors should be both transparent and explain to the public the motives of investment strategy changes.

A Collaborative Model for Long-Term Investing

2017 ◽  
Author(s):  
Ashby Monk ◽  
Rajiv Sharma ◽  
Duncan L. Sinclair
Keyword(s):  
Social Network ◽  
Network Theory ◽  
Institutional Investors ◽  
Social Network Theory ◽  
Clear Distinction ◽  
Financial Intermediaries ◽  
Collaborative Model ◽  
Short Termism

This chapter introduces the key themes that will be looked at in this book. In particular, it looks at the problem of long-term investing, illustrating why institutional investors are not acting in a long-term manner and the repercussions that this has for wider society. It provides a clear distinction between asset owner investors who have monopolies over their capital source and financial intermediaries, who are essentially acting on the former’s behalf but have come under much scrutiny for their shorter-term, opportunistic, and at times unethical behavior. The collaborative model of long-term investing and re-intermediation thesis is introduced as an innovative way for institutional investors to overcome some of the challenges of short-termism. The chapter outlines how social network theory and economic sociology are used to validate the collaborative model. This paves the way for detailed explanations and case study examples starting in Chapter 2.

Institutional equity investing in Britain from 1900 to 2000

2019 ◽  
Vol 26 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Nigel Morecroft ◽  
Craig Turnbull
Keyword(s):  
Financial Institutions ◽  
Institutional Investors ◽  
Equity Markets ◽  
Pension Funds ◽  
Short Period ◽  
Asset Class

In Britain around 1900, established financial institutions for long-term savings such as life assurers, and pension funds which were just in their formative phase, did not make material allocations to publicly quoted equity markets or ordinary shares; long-established life assurers, for example, had less than 3 per cent allocated to the asset class (Baker and Collins 2003). Over the following 100 years, this picture radically changed, with equities emerging as the central asset class for many institutional investors and the term ‘the cult of (the) equity’ was coined (Scott 2002; Avrahampour 2015). As the century progressed, institutional investors superseded private individuals and became the dominant holders of British publicly quoted companies (Cheffins 2010). Despite the attractions of the asset class and their generally high returns, within a relatively short period by the end of the century, institutional equity exposure had peaked and was in decline both at life assurers and within pension funds. Here we highlight, and link together, the key actuarial (Turnbull 2017) and investing (Morecroft 2017) ideas that were influential in these developments. We also identify the main individuals who were instrumental in the application of equity investing to institutional portfolios. The article has an emphasis towards years from 1920 to 1960 when most of the changes to investment practice and actuarial theory occurred.

Ambiguity, discretion and ethics in Norway's sovereign wealth fund

2015 ◽  
Vol 17 (4) ◽  
pp. 603-631
Author(s):  
Heather Hachigian
Keyword(s):  
Financial Markets ◽  
Institutional Investors ◽  
Analytical Framework ◽  
Investment Policy ◽  
Ethical Investment ◽  
Policy Goal ◽  
Sovereign Wealth Fund ◽  
Investment Policies ◽  
Implementation Problems

An increasing number of public institutional investors are adopting sustainable and ethical investment policies. While financial tests of materiality and norm structures are often assumed to guide their implementation, this assumption is challenged by the increasing complexity in global financial markets. This article provides an analytical framework to explain these implementation problems by drawing attention to the ambiguity inherent in investment policies. Ambiguity means there is no ideal outcome. Agents must use their discretion to interpret investment policies, which is at odds with conventional theories of discretion that assume a unique policy goal. This article argues that ambiguity impacts institutional investors in two contrasting ways. Ambiguity acts as a built-in mechanism for adapting investment policies to increasing complexity in global financial markets. But the resources required to maintain legitimacy under ambiguity detract from the investor's capacity to actually implement its policy. This framework is used to analyze the evolution of the Norwegian sovereign wealth fund (SWF)'s ethical investment policy. The article finds that agents use their discretion to interpret the Fund's investment policy in ways that align with its long-term mandate.

Sovereign wealth fund investments and policy implications: a survey

2015 ◽  
Vol 23 (3) ◽  
pp. 210-229 ◽  
Author(s):  
Chen Meng
Keyword(s):  
Asset Allocation ◽  
Institutional Investors ◽  
Multinational Enterprises ◽  
Data Access ◽  
Policy Implications ◽  
Investment Strategies ◽  
Content Type ◽  
Comprehensive Survey ◽  
Definition Of

Purpose – The purpose of this paper is to address a research gap by providing a comprehensive survey of sovereign wealth funds (SWFs) as international institutional investors and clarifying the definition of SWFs. By doing so, this paper aims to provide a balanced set of policy prescriptions towards SWFs. Design/methodology/approach – This paper conducted a comprehensive survey of world major 24 SWFs with assets under management of 500 million USD between 2008 and 2012. Key dimensions include objectives, funding and governance, asset allocation and investment activities. Findings – SWFs are planning institutions with management direction. They present great variety in terms of funding mechanism, governance, asset allocation and investment strategies, but they in essence pursue financial returns. It is not evident that SWFs are primarily motivated by political objectives and distinctively different from other international institutional investors. Difficulty in interpreting SWFs should not lead to the imposition of constraints on SWFs. Research limitations/implications – More in-depth and dynamic analysis of SWFs requires better data access. For such a purpose, case studies and longitudinal studies should be adopted, with particular emphasis on comparing SWFs with different types of financial institutional investors as well as typical state-owned enterprises (SOEs) and multinational enterprises. Practical implications – This study is trying to demystify SWFs based on a comprehensive survey. As a result, this paper may assist investors, policy-makers and regulators to gain a better understanding of SWFs, their investment behaviours and rationales behind. Social implications – SWFs like other long-term capital is important for economic and job growth. To attract long-term investments, creating an open, unbiased and welcoming investment environment is the key. Originality/value – The contribution of this paper is that we provide a deeper understanding of the strategy and empirics of SWF operations. First, after a clearer definition of the phenomenon of SWFs, we can explain their investment strategies and behaviour as firms. Second, we can derive rational policy prescriptions, and third, we can propose a research agenda that will further deepen our understanding of SWFs and the appropriate policy prescriptions.

scholarly journals Institutional Shareholdings and Financial Characteristics of Malaysian Listed Companies

2020 ◽  
Author(s):  
Shamsul Naharabdullah ◽  
Mohd Azlan Yahya ◽  
Faisol Elham
Keyword(s):  
Institutional Investors ◽  
Listed Companies ◽  
Financial Ratios ◽  
Short Term ◽  
Growth Ratio ◽  
Primary Motivation ◽  
The Mean ◽  
Financial Characteristics ◽  
Institutional Shareholders

This study attempts to investigate the extent to which the financial characteristics of firms are related to institutional shareholdings. The primary motivation to carry out the study comes from an earlier paper by Hessel and Norman (1992), which showed that seven financial ratios discriminated between strongly-held and institutionally-neglected firms. As an extension of the study, the present study seeks to investigate the seven financial ratios among Malaysian companies by identifying differences in the means of the seven ratios between a group of companies with substantial institutional shareholdings against another group of companies with negligible institutional shareholdings. The findings, from a sample of KLSE listed companies, broadly support the findings by Hessel and Norman (1992), in which firms with significant institutional shareholdings exhibited a significantly higher profitability ratio against firms that were neglected by institutional investors.. This suggested that institutional investors placed greater emphasis on a firm's short-term results. Our evidence also did not indicate institutional shareholders' direct involvement in ensuring a firm's long-term growth and competitiveness, as shown by the insignificant differences in the mean of growth ratio between firms that had significant institutional shareholdings and those that were neglected by institutional investors.  

scholarly journals MEKANISME CORPORATE GOVERNANCE DAN MANAJEMEN LABA MODEL LONG TERM DISCRETIONARY ACCRUAL PADA PERUSAHAAN GO PUBLIK DI INDONESIA

2019 ◽  
Vol 21 (1) ◽  
pp. 55-69
Author(s):  
Wiyadi Wiyadi ◽  
Rina Trisnawati ◽  
Ecclisia Sulistyowati
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Institutional Investors ◽  
Audit Committee ◽  
Governance Mechanism ◽  
Purposive Sampling ◽  
Discretionary Accrual ◽  
Corporate Governance Mechanisms ◽  
Corporate Governance Mechanism

Penelitian ini bertujuan menganalisis pengaruh mekanisme corporate governanceinternal dan eksternal terhadap manajemen laba dengan pendekatan long termdiscretionary accrual perusahaan go publik di Indonesia yang tergabung dalamindeks LQ45 dan JII selama periode 2011-2015. Sampel penelitian berjumlah 226perusahaan diambil secara purposive sampling. Mekanisme CorporateGovernance terbagi menjadi: Mekanisme Corporate Governance internal daneksternal. Mekanisme Corporate Governance internal diproksikan dengan komiteaudit dan dewan komisaris independen. Sedangkan corporate governanceeksternal diproksikan dengan konsentrasi kepemilikan dan investor institusi.Metode analisis data menggunakan regresi linier berganda. Hasil penelitianmenunjukkan bahwa konsentrasi kepemilikan berpengaruh terhadap manajemenlaba. Sedangkan komite audit, dewan komisaris independen dan investor institusitidak berpengaruh terhadap manajemen laba.This study aims to analyze the influence of internal and external corporate governance mechanisms on earnings management with the long term discretionary accrual approach of companies incorporated in the LQ45 and JII indices during the period 2011-2015. The research sample was 226 companies taken by purposive sampling. The Corporate Governance mechanism is divided into: Internal and external Corporate Governance Mechanisms. The internal Corporate Governance mechanism is proxied by the audit committee and independent board of commissioners. While external corporate governance is proxied by the concentration of ownership and institutional investors. Methods of data analysis using multiple linear regression. The results showed that ownership concentration had an effect on earnings management. While the audit committee, independent board of commissioners and institutional investors have no effect on earnings management

Sign in / Sign up

Export Citation Format

Share Document