Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes UK Focus Fund
AbstractThis article reports a unique analysis of private engagements by an activist fund. It is based on data made available to us by Hermes, the fund manager owned by the British Telecom Pension Scheme, on engagements with management in companies targeted by its UK Focus Fund. In contrast with most previous studies of activism, we report that the fund executes shareholder activism predominantly through private interventions that would be unobservable in studies purely relying on public information. The fund substantially outperforms benchmarks and we estimate that abnormal returns are largely associated with engagements rather than stock picking. The Author 2008. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: firstname.lastname@example.org., Oxford University Press.
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Bibliographic InfoArticle provided by Society for Financial Studies in its journal The Review of Financial Studies.
Volume (Year): 23 (2010)
Issue (Month): 3 (March)
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Other versions of this item:
- Marco Becht & Julian Franks & Colin Mayer & Stefano Rossi, 2010. "Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes UK Focus Fund," NBER Chapters, in: Corporate Governance National Bureau of Economic Research, Inc.
- Marco Becht & Julian Franks & Colin Mayer & Stefano Rossi, 2009. "Returns to Shareholder Activism: Evidence from a Clinical Study of the Hermes UK Focus Fund," Review of Financial Studies, Society for Financial Studies, vol. 22(8), pages 3093-3129, August.
- Colin Mayer & Marco Becht, 2008. "Returns to Shareholder ActivismÂ Evidence from a Clinical Study of the Hermes U.K. Focus Fund," Economics Series Working Papers 2008fe07, University of Oxford, Department of Economics.
- Marco Becht & Julian R. Franks & Colin Mayer & Stefano Rossi, 2008. "Return to shareholder activism: evidence from a clinical study of the Hermes U.K. Focus fund," ULB Institutional Repository 2013/13304, ULB -- Universite Libre de Bruxelles.
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
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