Comments on: Hedge Fund Activism, Corporate Governance, and Firm Performance
-
Upload
fritz-cleveland -
Category
Documents
-
view
17 -
download
1
description
Transcript of Comments on: Hedge Fund Activism, Corporate Governance, and Firm Performance
Comments on:
Hedge Fund Activism, Corporate Governance, and Firm Performance
Dr. Joseph R. MasonDrexel University, The Wharton School, and Federal Deposit Insurance Corporation
Overall Objective of Paper
Define HF Activism
Identify HF Selections
Measure HF Effects
Define HF Activism: Wide Variety of HF Strategies
Fundamental Underlying
Information
Capital
Define HF Activism: Wide Variety of HF Strategies
Fundamental Underlying
Information
Capital
Define HF Activism: Wide Variety of HF Strategies
Fundamental Underlying
Information
Capital
Define HF Activism: Wide Variety of HF Strategies
Fundamental Underlying
Information
Capital
Regulatory Arbitrage
Regulatory Arbitrage: Hedge Fund Voting
Is this activism by BJPT
definition?
Identifying HF Selections
Selection is partially the firm, but also the level of activism.
Category 1, “Communicate with board/management…”
Category 7, HF “intends to take full control…” Many ways to econometrically differentiate
levels of activism. GIM 2003 QJE
Selection bias (with truncation): Only see those that HF invest in beyond threshold.
Partial observability bias: Don’t see rejected investment opportunities.
Measure HF Effects: Other Tests
Post-“activism” operating performance.
Performance of HF pursuing “activist” agendas.
All models estimated on basis of predicted “activism level” and Heckman methods
Overall Objective of Paper
Define HF Activism Think hard about def’n of activism
Identify HF Selections Think hard about distinctions between objectives Think hard about selection-obervability-act, level.
Measure HF Effects Formal selection model
Estimate with care: Results fascinating!