Over the past two decades, shareholder activism has become an important element of the corporate governance landscape, with hedge funds and private equity firms starting to play an increasingly prominent role. Although hedge fund and private equity activism is widely discussed, it remains poorly understood, with scarce large-sample empirical evidence on the firms that these activists target, their strategic objectives, and the performance effects from their initiatives. Anecdotal evidence suggests that fund activism has achieved a certain degree of success in reshaping target firms, encouraging restructurings, mergers, and dividend recapitalizations, and the replacement of management and board members. Yet critics and regulators question whether hedge fund and private equity activists benefit shareholders, with numerous claims that their interventions destroy value by distracting managers from long-term projects.
Institutional Investor Activism: Hedge Funds and Private Equity, Economics and Regulation is a collection of essays wherein leading corporate governance scholars examine various aspects...
