A1227
Title: Activist hedge fund performance
Authors: Juha Joenvaara - Aalto University (Finland) [presenting]
Christian Lundblad - University of North Carolina at Chapel Hill (United States)
Philip Howard - Wake Forest University (United States)
Greg Brown - University of North Carolina at Chapel Hill (United States)
Abstract: Using a novel data set containing almost all activist hedge funds, the following questions are posed: Do activist hedge funds create value and/or risk for investors? What are the risk-reward characteristics of activist hedge funds? Who reaps the rewards from activist campaigns: shareholders, fund managers, and/or fund investors? We contribute to the existing literature by examining the effects of activism from investors' perspectives, not the target companies or their shareholders and creditors. Although the literature has documented the positive short-term and long-term effects related to firm performance and the real economy, it is not clear whether investors providing funding to activist hedge funds earn excess returns or whether fund managers extract all economic rents.
