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Title :The impact of Hedge Fund Activism on the stocks of the Athens Exchange Market during 2008-2016
Creator :Karavias, Iason
Contributor :Leledakis, Georgios (Επιβλέπων καθηγητής)
Athens University of Economics and Business, Department of Accounting and Finance (Degree granting institution)
Type :Text
Extent :57p.
Language :en
Abstract :This study traces the rise of hedge fund activism in Greece. Despite the blow of the 2008 financial crisis, hedge fund interventions still exist across the global economy. Shareholder activism by hedge funds has become a major trend in the United States within the last decade. Compared to other types of investors, hedge funds seem to be more activist than predicted, due to the unexpectedly significant role of several antecedent variables. The relatively lightly regulated environment of the hedge funds affects the weighting conventional activism-antecedent variables.The purpose of this paper is a) to identify the typical targets of activism and b) to explore if hedge funds create value for the shareholders. Using a manually collected database of activism filings to the Athens Exchange Market, from 2008 to 2016, we found that hedge fund activism creates value both for the shareholders of the companies targeted and for the hedge fund investors. The abnormal return upon the announcement of the event is statistically significant and is evidence of how its effect on the operating and financial decisions of the company targeted, increases the shareholders’ wealth.Hedge fund activists tend to target “value” companies, which have low valuations in relation to their “fundamentals”. On the one hand, they are profitable, have sound operating cash flows and returns on assets, while on the other hand, they have low (sales) growth rates, leverage and dividend payout before the intervention.
Subject :Hedge Fund Activism
Athens Exchange Market
Hedge fund investors
Date :31-10-2017
Licence :

File: Karavias_2017.pdf

Type: application/pdf