Hedge Fund Activism in Europe: Are Activist Hedge Funds Guardians of Shareholder Value?

Magnus Noack & Nils Fredrik Cedergren

Student thesis: Master thesis

Abstract

Shareholder activism is becoming an established investment strategy by hedge funds in Europe. Even though this corporate governance phenomenon is contemporaneously causing a lot of political controversies, it has not been widely researched in this part of the world yet. Existing publications have not reached a consensus on whether activist influence has a beneficial effect on the shareholder value and future development of targeted European companies or not. With an extensive hand-collected data set, comprising 494 public campaigns by 140 different hedge funds targeting 354 individual companies in 25 European countries between 2010 and 2019, we provide new and recent insights for the ongoing debate on the effects of activist hedge funds on shareholder value in Europe. We find significant positive short- and long-term stock price effects around and following activist interventions as well as indications for a favourable operational development of targeted companies given sufficiently long time.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages93