Hedge Funds & Poison Pills: Can Typical Hedge Fund Activism Really Be Considered a Reasonable Threat Under Unocal?

2012 ◽  
Author(s):  
Vincent V. Hilldrup
Keyword(s):  
Hedge Funds ◽  
Hedge Fund ◽  
Poison Pills ◽  
Hedge Fund Activism

Hedge Fund Activism vs Other Activist Investors

2021 ◽  
pp. 252-282
Author(s):  
Ulf von Lilienfeld-Toal ◽  
Jan Schnitzler
Keyword(s):  
Empirical Analysis ◽  
Hedge Funds ◽  
Hedge Fund ◽  
Empirical Literature ◽  
Comparative Approach ◽  
Large Sample ◽  
Shareholder Proposals ◽  
Target Firms ◽  
Hedge Fund Activism ◽  
The Impact

This chapter reviews the growing empirical literature on shareholder activism by hedge funds. The aim is a comparative approach contrasting the impact of hedge fund activism on target firms with outcomes for other types of activist investors. Following recent research, the chapter provides an empirical analysis based on the disclosure of equity blockholdings by activist investors in a large sample of all US listed companies. In addition, it summarizes which types of investors engage in other events linked to activism, such as takeovers, proxy contests, or shareholder proposals. Overall, there is evidence that not only hedge funds but also other types of investors can be effective monitors, but there are nuanced differences with respect to targeting decisions and payout policies.

Hedge Fund Activism and Corporate M&A Decisions

2021 ◽  
Author(s):  
Szu-Yin (Jennifer) Wu ◽  
Kee H. Chung
Keyword(s):  
Mergers And Acquisitions ◽  
Selection Bias ◽  
Hedge Funds ◽  
Operating Performance ◽  
Hedge Fund ◽  
Corporate Control ◽  
Market For Corporate Control ◽  
Target Firms ◽  
Governance Practices ◽  
Hedge Fund Activism

This paper shows that hedge fund activism is associated with a decrease in mergers and acquisitions (M&A) and offer premiums and an increase in stock and operating performance. Activist hedge funds improve target firms’ M&A performance by reducing poor M&A, diversifying M&A, and the M&A of firms with multiple business segments. Activist hedge funds improve target firms’ M&A decisions by influencing their governance practices. We show that our results are unlikely driven by selection bias. Overall, activist hedge funds play an important role in the market for corporate control by increasing the efficiency of target firms’ M&A activities through interventions. This paper was accepted by Gustavo Manso, finance.

Hedge Fund Activism and Corporate Innovation

2021 ◽  
pp. 380-390
Author(s):  
Roberto S. Santos ◽  
Sunny Li Sun
Keyword(s):  
Hedge Funds ◽  
Hedge Fund ◽  
Innovation Performance ◽  
Future Research ◽  
Term Survival ◽  
Long Term Survival ◽  
Corporate Innovation ◽  
Hedge Fund Activism

While the jury is out on whether hedge fund activism encourages corporate innovation, there is mounting evidence to suggest that this is the case. A firm’s ability to innovate is crucial for its long-term survival. Through multiple mechanisms, activist hedge fund interventions can “shake things up” and stir corporations out of their myopic innovation investments. By bringing an end to the squandering of precious R&D resources, hedge fund activism stimulates and reshapes corporate competitiveness and enhances innovation performance. This chapter explores the strategies and mechanisms that activist hedge funds employ to influence corporate innovation and also offers avenues for future research.

The Oxford Handbook of Hedge Funds

2021 ◽  
Keyword(s):  
Hedge Funds ◽  
Optimal Taxation ◽  
Private Equity ◽  
Hedge Fund ◽  
Global Perspective ◽  
Fund Flows ◽  
Theoretical Approaches ◽  
The Us ◽  
Hedge Fund Activism ◽  
The Impact

The Oxford Handbook of Hedge Funds provides a comprehensive look at the hedge fund industry from a global perspective. The chapters are organized into five main parts. After the introductory chapter in Part I, Part II begins in Chapter 2 with an analysis of the main factors that have affected the operation of hedge funds. Chapter 3 explains the concept of hedge fund flows. Chapter 4 examines hedge fund manager fees and contracts. Part III focuses on different types of hedge fund strategies. The broad array of strategies are summarized in Chapter 5. Chapter 6 empirically examines the performance of hedge fund strategies. Chapter 7 compares the strategies of hedge funds to private equity funds. Chapter 8 examines hedge fund herding. Chapter 9 examines hedge fund commodity trading advisors and leverage. Chapter 10 examines financial technology in hedge fund strategies. In Part IV, hedge fund activism in the US is examined in Chapter 11. The US and international literature on hedge fund activism is reviewed in different perspectives in Chapters 12 and 13. Case studies are provided in Chapter 14. The impact of activism on large company innovation is discussed in Chapter 15. In Part V, Chapter 16 examines whether hedge funds may engage in misreporting and fraud. Chapter 17 reviews work on hedge fund misconduct and detection. Chapter 18 discusses compliance among hedge funds. Chapter 19 examines theoretical approaches to hedge fund regulation. Chapter 20 examines optimal taxation. Chapter 21 examines hedge funds from a political economy context.

Shareholder Activism in the CMU

2018 ◽  
Author(s):  
Alessio M Pacces
Keyword(s):  
Business Model ◽  
Hedge Funds ◽  
Hedge Fund ◽  
Shareholder Activism ◽  
Shareholder Rights ◽  
New Targets ◽  
Public Company ◽  
Hedge Fund Activism ◽  
Institutional Shareholders

Hedge fund activism is on the rise in Europe. Whereas hedge funds activism has been so far largely a U.S. phenomenon, there is survey evidence suggesting that hedge funds are looking for new targets. Europe is particularly attractive in this respect because the European jurisdictions support broader rights than those available to the shareholders of a typical Delaware-incorporated U.S. public company. Shareholder rights are an important part of the activist hedge fund's toolbox, although they must be understood in light of the activist's business model. This chapter discusses hedge fund activism as a major driver of institutional shareholders' engagement, particularly in Europe. It argues that the revision of the Shareholder Rights Directive (SRD) curbs rather than supports hedge funds activism, therefore casting some doubts as to whether the SRD will effectively foster engagement and investment by institutional shareholders.

A Review of Hedge Fund Activism: Impact on Shareholders vs. Stakeholders

2021 ◽  
pp. 282-317
Author(s):  
Hadiye Aslan
Keyword(s):  
Hedge Funds ◽  
Hedge Fund ◽  
Spillover Effects ◽  
Empirical Literature ◽  
Target Firm ◽  
Market Strategy ◽  
Target Firms ◽  
Product Market Strategy ◽  
Hedge Fund Activism ◽  
Rival Firms

This chapter reviews the growing empirical literature on shareholder activism by hedge funds, summarizing the sources and nature of the activist data and examining the evidence on target firm outcomes. Target firms do not exist in a vacuum, however; they have industry competitors, suppliers, customers, debtholders, and employees. Hedge fund activists often demand a reformulation of the target firm’s product market strategy to enhance its ability to earn inframarginal profits. This positive strategic effect may be especially significant for target firms that are economically distressed and facing predatory moves from deep-pocketed rival firms to induce exit. The putative significant effects of hedge fund activism on targets should generate spillover effects on their stakeholders. The chapter considers these spillover effects in a number of well-defined categories: industry rivals, customers, suppliers, debtholders, and employees.

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