Review of Financial Studies Vol. 30 No. 9 2017

Returns to Hedge Fund Activism: An International Study

Marco Becht¹; Julian Franks²; Jeremy Grant³; Hannes F. Wagner⁴

¹ Solvay Brussels School, Université libre de Bruxelles, CEPR, and ECGI · ² London Business School, CEPR, and ECGI · ³ Berenberg Bank · ⁴ Bocconi University and IGIER

Abstract

This paper provides evidence on the incidence, characteristics, and performance of activist engagements across countries. We find that the incidence of activism is greatest with high institutional ownership, particularly for U.S. institutions. We use a sample of 1,740 activist engagements across 23 countries and find that almost one-quarter of engagements are by multi-activists engaging the same target. These engagements perform strikingly better than single activist engagements. Engagement outcomes, such as board changes and takeovers, vary across countries and significantly contribute to the returns to activism. Japan is an exception, with high initial expectations and low outcomes.

DOI

10.1093/rfs/hhx048

Volume

30

Issue

9

Pages

2933-2971

Language

en

Sources

openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓