Managerialism versus Shareholderism: An Examination of Hedge Fund Activism

Marguerite Schneider

Chapter Chapter 8 in Shareholder Empowerment, 2015, pp 171-199 from Palgrave Macmillan

Abstract: Abstract For investment institutions that fully exploit their private status, hedge funds command a surprisingly large public profile. For example, the media gave significant coverage to SAC, the hedge fund started by Steven A. Cohen, with eight employees convicted of insider trading (Stevenson & Goldstein, 2014). Recent cases of successful hedge fund activism include Daniel Loeb’s Third Point Fund pressuring of auction house Sotheby’s—the oldest company traded on the NYSE—to separate its businesses, engage in stock buybacks, and increase its dividend (Stevenson & de la Merced, 2014). A case of activism that has met with opposition from other investors concerns leveraged-buyout-turned-hedge-fund-activist Carl C. Icahn pressing Apple for a stock buyback (de la Merced, 2014). Another visible case is the battle between William A. Ackman of Pershing Square Capital Management and Herbalife, in which he has “pulled the levers of power” in pressing regulators and politicians against the company (Schmidt, Lipton, & Stevenson, 2014). Rooted in collective memory is Long-Term Capital Management, which in 1998 created turmoil in currency markets, causing 14 central banks to facilitate efforts to avoid global contagion of the downturn (Dungey, Frey, Gonzalez-Hermosillo, & Martin, 2007; Furfine, 2006; Halstead, Hedge, & Klein, 2005) and leading to popular use of the phrases “too big to fail” and “moral hazard.” Yet, despite the publicity surrounding them and despite their global importance, information about hedge funds remains incomplete and insufficient (McCahery & Vermeulen, 2008).

Keywords: Corporate Governance; Mutual Fund; Institutional Investor; Hedge Fund; Private Equity (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-37393-9_8

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137373939

DOI: 10.1057/9781137373939_8

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().