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The returns to hedge fund activism

Publication ,  Journal Article
Brav, A; Jiang, W; Partnoy, F; Thomas, RS
Published in: Financial Analysts Journal
November 1, 2008
Published version (DOI)

Hedge fund activism is a new form of investment strategy. Using a large hand-collected dataset from 2001 to 2006, we find that activist hedge funds in the United States propose strategic, operational, and financial remedies and attain success or partial success in two-thirds of the cases. The abnormal stock return upon announcement of activism is approximately 7 percent, with no reversal during the subsequent year. Target firms experience increases in payout and operating performance and higher CEO turnover after activism. We find large positive abnormal return to hedge fund activists, which is higher than the return to other equity-oriented hedge funds. © 2008, CFA Institute.

Duke Scholars

Alon Brav
Author Alon Brav Fuqua School of Business

Published In

Financial Analysts Journal

DOI

10.2469/faj.v64.n6.7

ISSN

0015-198X

Publication Date

November 1, 2008

Volume

64

Issue

6

Start / End Page

45 / 61

Related Subject Headings

  • Finance
  • 3502 Banking, finance and investment
  • 3501 Accounting, auditing and accountability
  • 1502 Banking, Finance and Investment
  • 1501 Accounting, Auditing and Accountability
 

Citation

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Brav, A., Jiang, W., Partnoy, F., & Thomas, R. S. (2008). The returns to hedge fund activism. Financial Analysts Journal, 64(6), 45–61. https://doi.org/10.2469/faj.v64.n6.7
Brav, A., W. Jiang, F. Partnoy, and R. S. Thomas. “The returns to hedge fund activism.” Financial Analysts Journal 64, no. 6 (November 1, 2008): 45–61. https://doi.org/10.2469/faj.v64.n6.7.
Brav A, Jiang W, Partnoy F, Thomas RS. The returns to hedge fund activism. Financial Analysts Journal. 2008 Nov 1;64(6):45–61.
Brav, A., et al. “The returns to hedge fund activism.” Financial Analysts Journal, vol. 64, no. 6, Nov. 2008, pp. 45–61. Scopus, doi:10.2469/faj.v64.n6.7.
Brav A, Jiang W, Partnoy F, Thomas RS. The returns to hedge fund activism. Financial Analysts Journal. 2008 Nov 1;64(6):45–61.

Published In

Financial Analysts Journal

DOI

10.2469/faj.v64.n6.7

ISSN

0015-198X

Publication Date

November 1, 2008

Volume

64

Issue

6

Start / End Page

45 / 61

Related Subject Headings

  • Finance
  • 3502 Banking, finance and investment
  • 3501 Accounting, auditing and accountability
  • 1502 Banking, Finance and Investment
  • 1501 Accounting, Auditing and Accountability