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Hedge Fund Activism: A Review



Author(s): Alon Brav;Wei Jiang;Hyunseob Kim

Source:
    Journal:Foundations and Trends® in Finance
    ISSN Print:1567-2395,  ISSN Online:1567-2409
    Publisher:Now Publishers
    Volume 4 Number 3,

Document Type: Article
Pages: 62 (185-246)
DOI: 10.1561/0500000026

Abstract:

This monograph reviews shareholder activism by hedge funds. We first describe the nature and characteristics of hedge fund activism, including the objectives, tactics, and choices of target companies. We then analyze possible value creation brought about by activist hedge funds, both for shareholders in the target companies and for investors in the hedge funds. The evidence generally supports the view that hedge fund activism creates value for shareholders by effectively influencing the governance, capital structure decisions, and operating performance of target firms.