The forthright brand of shareholder activism hedge funds deploy became during the 2000s a significant feature of Canadian corporate governance. This paper examines hedge fund activism ?Canadian style.? The paper characterizes the interventions hedge funds specialize in as ?offensive?
shareholder activism and uses a heuristic device, ?the market for corporate influence?, to identify the variables that dictate how frequent such activism is likely to be. This analytical structure is used to explain why hedge fund activism has become part of the Canadian corporate governance landscape and has displaced at least partly a Canadian shareholder ?culture of passivity.?
We provide a comprehensive overview of the role of institutional investors in corporate governance with three main components. First, we provide a detailed characterization of key aspects of the legal and regulatory setting within which ...Read more
We examine the governance role of delegated portfolio managers. In our model, investors decide how to allocate their wealth between passive funds, active funds, and private savings, and asset management fees are endogenously determined. Funds’...Read more
Institutional investors played a crucial role in the COVID-19 market crash. U.S. stocks with higher institutional ownership -- in particular, those held more by active, short-term, and domestic institutions -- performed worse. An analysis of...Read more
We model an investor’s choice between filing Schedules 13D and 13G and use the model to estimate expected returns to activist and passive investing. Using the model, we decompose average Schedule 13D filing announcement returns into treatment (75...Read more