Hedge Fund Activism in Europe

Hedge Fund Activism in Europe

Marco Becht, Julian Franks, Jeremy Grant

Series number :

Serial Number: 
283/2010

Date posted :

May 01 2010

Last revised :

June 07 2010
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Keywords

  • shareholder activism • 
  • Hedge Funds • 
  • active ownership • 
  • institutional investors

The paper analyzes 362 European activist interventions by hedge funds, focus funds and other activist investors from 2000 to 2008. The sample includes both public and private interventions. The private interventions are based upon proprietary data collected from five activist funds.

For public interventions the disclosure of acquired stakes is associated with large positive abnormal returns across a number of jurisdictions. Private activism is extensive and profitable but less so than public activism, in large part because the incidence of takeovers is higher in public activism. The returns from hostile activist interventions are more profitable than co-operative ones, and returns for specialist activist funds are substantially larger than for other investors. After controlling for these factors legal jurisdiction does not explain differences in returns across countries.

Authors

Real name: 
Fellow, Research Member, Institutional Member, Board Member
Solvay Brussels School for Economics and Management, Université libre de Bruxelles
Real name: 
Jeremy Grant
Academic Member
Graduate Institute of International Studies, Geneva and London School of Economics