Sky Blog
On July 10, the Securities and Exchange Commission (SEC) proposed a 35-fold increase – from $100 million to $3.5 billion – in the threshold for requiring institutional investment managers to publicly report their equity holdings on Form 13F.[1] This …
On October 12, 2015, an activist hedge fund we’ll call John Doe Management filed a Form 13D, disclosing 5.5 percent ownership and an intent to pursue an activist campaign in a target firm we’ll call Industrial Corp (IC). The next …
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 …
The analysis of corporate governance has been a strikingly one-sided affair. The focus has been almost exclusively on “internal” checks and balances, namely scrutiny of executives by the board of directors and by shareholders. In contrast, mechanisms that can operate …
The creation of the mutual fund will go down as one of the greatest innovations in financial history. It has provided tens if not hundreds of millions of unsophisticated and uninformed stock market investors with easy access to low cost …
In 2001, hedge fund manager Cliff Asness co-wrote a famous paper, Do Hedge Funds Hedge?1 Sixteen years later, amid significant changes in the industry, it’s worth asking, Are hedge funds worth as much as they say they are? And …
Corporate governance mechanisms that mitigate problems associated with the separation of ownership and control include board monitoring of managers, compensation incentives, a market for corporate control, and government regulation. Recently, shareholder activism has become an increasingly popular tool as well. …
Investor activism is an important mechanism by which a company’s shareholders can affect corporate decisionmaking. To legally compel corporate managers to change policies, activist investors must engage in proxy fights during which they solicit support for their proposals from other …
Activist investors that believe an agency problem exists between shareholders and management may attempt a proxy contest aimed at specific issues or control of the board. Research shows that, in anticipation of a proxy contest, managers make significant adjustments in …
Hedge funds have boosted shareholder activism worldwide. In my recent article, I discuss the policy response to hedge fund activism. I argue that the short-termism debate cannot shed light on the desirability of such activism. Rather, hedge fund activism should …
Shareholder activism remains a major force in corporate decision-making in 2016 but is increasingly operating in an environment of robust, multi-faceted shareholder engagement, particularly at large companies. The time and effort that companies and institutional investors have spent developing a …
Attempts by U.S. federal officials to regulate corporate governance have been criticized by prominent scholars as “quackery.”[1] Major reforms like Sarbanes-Oxley and Dodd-Frank may in fact do far more harm than good. But what if these efforts at healing …
This post comes to us from Professor John Morley, who is currently an associate professor of law at the University of Virginia School of Law. He will be joining the Yale Law School faculty as an associate professor this July. …
In recent years, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have aggressively investigated and enforced both the anti-bribery and accounting provisions of the Foreign Corrupt Practices Act (FCPA). Many of these matters have been the …