Lecture

Share-holder Activism

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In course

FIN-405: Investments

The course covers a wide range of topics in investment analysis ...

Description

This lecture explores the rise of share-holder activism in corporate governance, focusing on prominent activists like Icahn, Ackman, and Peltz. It delves into the significant increase in assets managed by activist hedge funds, the strategies they employ, and recent examples of activism campaigns. The lecture also discusses the impact of activism on market performance and liquidity, highlighting the short and long-term effects on stock turnover and returns. International evidence is presented to confirm the success of activism in various regions. Additionally, the lecture covers the use of derivatives by activists, the implications of activism on market efficiency, and the challenges faced by arbitrageurs in correcting mispricings caused by irrational traders.

Instructor

Pierre Collin-Dufresne

Official source

Ontological neighbourhood

Business

Finance: Investment management

Related concepts (32)

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Hierarchy of evidence

A hierarchy of evidence, comprising levels of evidence (LOEs), that is, evidence levels (ELs), is a heuristic used to rank the relative strength of results obtained from experimental research, especially medical research. There is broad agreement on the relative strength of large-scale, epidemiological studies. More than 80 different hierarchies have been proposed for assessing medical evidence. The design of the study (such as a case report for an individual patient or a blinded randomized controlled trial) and the endpoints measured (such as survival or quality of life) affect the strength of the evidence.

Evidence-based practice

Evidence-based practice (EBP) is the idea that occupational practices ought to be based on scientific evidence. While seemingly obviously desirable, the proposal has been controversial, with some arguing that results may not specialize to individuals as well as traditional practices. Evidence-based practices have been gaining ground since the formal introduction of evidence-based medicine in 1992 and have spread to the allied health professions, education, management, law, public policy, architecture, and other fields.

Economic efficiency

In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: Allocative or Pareto efficiency: any changes made to assist one person would harm another. Productive efficiency: no additional output of one good can be obtained without decreasing the output of another good, and production proceeds at the lowest possible average total cost. These definitions are not equivalent: a market or other economic system may be allocatively but not productively efficient, or productively but not allocatively efficient.

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A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A fund of funds may be "fettered", meaning that it invests only in funds managed by the same investment company, or "unfettered", meaning that it can invest in external funds run by other managers.

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Hedge fund

Hierarchy of evidence

Evidence-based practice

Economic efficiency

Fund of funds