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Do activists align with larger mutual funds?

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  • Jha, Manish

Abstract

This study shows that hedge funds tend to design their activist campaigns to match the preferences and ideologies of institutions holding large stakes in the target company. These preferences are estimated by analyzing the institutions’ past proxy voting behavior. The findings show that activists benefit from this approach. Campaigns that show a stronger positive correlation between the preferences of larger institutions and activist communications attract more shareholder attention, receive more votes, and are more likely to succeed.

Suggested Citation

  • Jha, Manish, 2025. "Do activists align with larger mutual funds?," Journal of Banking & Finance, Elsevier, vol. 173(C).
    • Handle: RePEc:eee:jbfina:v:173:y:2025:i:c:s0378426625000226
    DOI: 10.1016/j.jbankfin.2025.107402
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    More about this item

    Keywords

    Hedge fund activism; Shareholder preferences; Text analysis; Machine learning;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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