Sky Blog
Despite ebbs and flows of global economic uncertainty, M&A activity remained robust in 2019. Total deal volume reached $4 trillion globally, a slight decrease from the $4.1 trillion volume in 2018, but higher than the $3.5 trillion in 2017. The …
Shareholder activism is an investment strategy that investors such as hedge funds (HFs) use to increase the value of their investment by intervening in the management of a targeted firm. Activists can nudge management to take shareholder-friendly actions such as …
In response to the sharp increase in campaigns by activist hedge funds in France and Europe generally, a French commission has conducted an extensive investigation and issued a carefully researched, reasonable and balanced report recommending regulatory and procedural changes to …
Shareholder activism is growing in popularity across the world and appears to deliver mostly benign results for firms and stockholders. However, testing the effects of activism is problematic. For at least 30 years, researchers have recognized the difficulty of causal …
As stewardship by institutional investors is an integral part of an adequate system of corporate governance, the growing diffusion of stewardship codes can be seen as a principal reaction to institutional investors’ reticence in monitoring the companies they invest in. …
The intensifying spotlight turned on boards of directors and management teams by investors prompts a fresh look at how public companies approach board development, director succession planning and refreshment in advance of an activist attack, shareholder unrest or a crisis …
While shareholder activism has drawn close attention, the activism of managers has been largely overlooked. One way CEOs may engage in activism is through collective action in business groups. This type of activism allows managers to coordinate among themselves and …
In recent times, the simmering feud between the church of the one share-one-vote and the heretic believers in shares with unequal voting rights has boiled over, particularly in the U.S.
The arguments pro and con this type of capital structure …
Regardless of industry, size or performance, no company should consider itself immune from hedge fund activism. No company is too large, too popular, too new or too successful. Even companies that are respected industry leaders and have outperformed the market …
What is the opportunity cost of private benefits of control? Using dollar cost of corporate giving to measure private benefits of control, we show in a recent study that (i) the consumption of private benefits creates a managerial aversion to …
The rise of shareholder activism, and its recent international expansion, have led researchers to look at many aspects of hedge fund activism. Academic papers have almost exclusively focused on the effects on firms targeted in activist campaigns. But the intense …
As a whole, 2018 proved to be another strong year for M&A. Total deal volume reached almost $4.2 trillion globally, higher than the $3.7 trillion volume of 2017, but still less than the record of over $5 trillion set in …
Debate continues to rage among politicians, professors, senior lawyers, and members of the media over the regulation of hedge fund activism. The primary criticism is that, in the absence of merger and acquisition activity, such activism does not create value …
A number of recent news stories have recounted the quick and dramatic changes that activist hedge funds trigger in the companies they target. In the Atlantic magazine, for example, a 2016 article describes DuPont’s decision to cut 10 percent of …
As we noted in early 2018, the threat of activism continues to be high, and has become a global phenomenon. The conclusion of a volatile and dynamic 2018 prompts a brief update of the state of play.
In recent years, it has become increasingly evident that the activism-driven corporate world is relatively fragile and is proving to be unsustainable, particularly when viewed in the broader context of rapidly changing political and social norms and increasing divisiveness across …
A recent decision of the Delaware Court of Chancery highlights the need for boards of directors of Delaware publicly traded companies to develop heightened awareness and vigilance in responding to shareholder activists, particularly those following a short-term agenda of putting …
We have recently seen an increase in contentious disputes, some public and many not, between companies and their debt investors. Clashes between borrowers and their lenders are as old as debt itself, but what we are seeing now is something …
Our new academic study examines the long-term effects of interventions by activist hedge funds. Prior studies document positive equal-weighted long-term returns and operating performance improvements following activist interventions, and typically conclude that activism is beneficial to shareholders. We challenge and …