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Institutional Investor Activism: Does the Portfolio Management Skill Matter?

Author

Listed:
  • Carlos F. alves

    (CEMPRE, Faculdade de Economia, Universidade do Porto)

  • Victor Mendes

    (CMVM – Comissão do Mercado de Valores Mobiliários)

Abstract

Institutional investors are often seen as potential solutions for corporate governance problems and are requested to have a more active role in the monitoring and control of listed companies. In this paper we develop a model that, within a universal banking framework, allows one to conclude that, the greater the capacity of a financial group to generate capital inflows that react to the performance of mutual funds, the more the said attitude is likely to succeed. The paper also concludes that the efforts of supervisory authorities should be directed in particular to the relations between universal financial groups and companies in which these financial groups do not have a relevant stake.

Suggested Citation

  • Carlos F. alves & Victor Mendes, 2005. "Institutional Investor Activism: Does the Portfolio Management Skill Matter?," FEP Working Papers 184, Universidade do Porto, Faculdade de Economia do Porto.
    • Handle: RePEc:por:fepwps:184
    as

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    File URL: http://www.fep.up.pt/investigacao/workingpapers/05.07.30_WP184_carlosalves.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Corporate Governance; Institutional Investor Activism; Universal Banking;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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