Hedge Fund Activism and Long-Term Firm Value

2015 ◽  
Author(s):  
Martijn Cremers ◽  
Erasmo Giambona ◽  
Simone M. Sepe ◽  
Ye Wang
Keyword(s):  
Firm Value ◽  
Hedge Fund ◽  
Hedge Fund Activism

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 The Long-Term Effects of Hedge Fund Activism

2013 ◽  
Author(s):  
Lucian A. Bebchuk ◽  
Alon P. Brav ◽  
Wei Jiang
Keyword(s):  
Hedge Fund ◽  
Long Term Effects ◽  
Hedge Fund Activism

scholarly journals The Long-Term Effects of Hedge Fund Activism

2015 ◽  
Author(s):  
Lucian Bebchuk ◽  
Alon Brav ◽  
Wei Jiang
Keyword(s):  
Hedge Fund ◽  
Long Term Effects ◽  
Hedge Fund Activism

scholarly journals The impact of hedge fund activism on target firm performance, executive compensation and executive wealth

2017 ◽  
Vol 6 (3) ◽  
pp. 14-28 ◽  
Author(s):  
Andrew Carrothers
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Firm Value ◽  
Hedge Fund ◽  
Share Price ◽  
Target Firm ◽  
Increased Risk ◽  
Target Firms ◽  
Hedge Fund Activism ◽  
The Impact

This paper examines the relationship between hedge fund activism and target firm performance, executive compensation, and executive wealth. It introduces a theoretical framework that describes the activism process as a sequence of discrete decisions. The methodology uses regression analysis on a matched sample based on firm size, industry, and market-to-book ratio. All regressions control for industry and year fixed effects. Schedule 13D Securities and Exchange Commission (SEC) filings are the source for the statistical sample of hedge fund target firms. I supplement that data with target firm financial, operating, and share price information from the CRSP-COMPUSTAT merged database. Activist hedge funds target undervalued or underperforming firms with high profitability and cash flows. They do not avoid firms with powerful CEOs. Leverage, executive compensation, pay for performance and CEO turnover increase at target firms after the arrival of the activist hedge fund. Target firm executives’ wealth is more sensitive to changes in share price after hedge fund activism events suggesting that the executive team experiences changes to their compensation structure that provides incentive to take action to improve returns to shareholders. The top executives reap rewards for increasing firm value but not for increased risk taking.

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 Long-Term Real Effects of Hedge Fund Activism

2011 ◽  
Author(s):  
Alon P. Brav ◽  
Wei Jiang ◽  
Hyunseob Kim
Keyword(s):  
Hedge Fund ◽  
Real Effects ◽  
Hedge Fund Activism
Sign in / Sign up

Export Citation Format

Share Document