Are all activists created equal? The effect of interventions by hedge funds and other private activists on long-term shareholder value

2021 ◽  
pp. 102144
Author(s):  
Edward P. Swanson ◽  
Glen M. Young ◽  
Christopher G. Yust
Keyword(s):  
Hedge Funds ◽  
Shareholder Value

McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?

2017 ◽  
pp. 1-24
Author(s):  
David P. Stowell ◽  
Tim Moore ◽  
Jeff Schumacher
Keyword(s):  
Hedge Funds ◽  
Shareholder Value ◽  
Hedge Fund ◽  
Corporate Management ◽  
Share Prices ◽  
Corporate Managers ◽  
Changing Roles ◽  
Time Warner ◽  
View Management

Are hedge funds heroes or villains? Management of Blockbuster, Time Warner, Six Flags, Knight-Ridder, and Bally Total Fitness might prefer the “villain” appellation, but Enron, WorldCom, Tyco, and HealthSouth shareholders might view management as the real villains and hedge funds as vehicles to oust incompetent corporate managers before they run companies into the ground or steal them through fraudulent transactions. Could the pressure exerted by activist hedge funds on targeted companies result in increased share prices, management accountability, and better communication with shareholders? Or does it distract management from its primary goal of enhancing long-term shareholder value?To determine the benefits and disadvantages of activist hedge fund activity from the perspective of corporate management and shareholders; to examine if a hedge fund's suggested corporate restructuring could create greater shareholder value; and to explain the changing roles and perspectives of hedge funds.

Hedge Funds and the Collapse of Long-Term Capital Management

CFA Digest ◽  
2000 ◽  
Vol 30 (1) ◽  
pp. 76-78
Author(s):  
David B. Miyazaki
Keyword(s):  
Hedge Funds ◽  
Capital Management

scholarly journals INVESTMENT STRATEGIES OF INSTITUTIONAL INVESTORS: SOVEREIGN WEALTH FUNDS VS ENDOWMENTS

2013 ◽  
pp. 117-126
Author(s):  
E. S. Biryukov
Keyword(s):  
Real Estate ◽  
Hedge Funds ◽  
Institutional Investors ◽  
Private Equity ◽  
Investment Strategy ◽  
High Yield ◽  
Income Volatility ◽  
Sovereign Wealth Funds ◽  
The World

The paper considers two main original approaches to investing the assets of institutional investors (the total amount of their assets in the world is about 100 trillion dollars) – the one of Norway's sovereign wealth fund Global and approach of Yale's endowment fund. Fund Global with assets of $ 716 billion dollars is the largest institutional investor in the world, its strategy is based on the assumption that markets are efficient and their long-term growth lies in the balance of investment in stocks , bonds, and , since more recent time - in real estate. Financiers of Yale in the 1990s revolutionized the approach to investment, firstly, by reducing the proportion of stocks and bonds in favor of private equity and real estate, and secondly , by shift from investments in the domestic market to foreign markets. Not all institutional investors are ready to follow these strategies because of the risk of negative returns in times of crises, but in the medium- and long-term, these approaches allow to beat inflation. For example, Yale's endowment has grown since 1985 to 2012 from 1.6 to 19 billion dollars, and high yield allows to transmit 1 billion dollars (!) to the budget of the university annually. Endowment funds are one of the key sources of revenues of leading American universities. Analysis of the investment policy of endowment funds and sovereign wealth funds shows that fundamental changes in the concept of investing began to occur since the late 1980s - early 1990s . Institutional investors of both these types ceased to focus on conservative instruments - bonds and deposits , and use other options: Global - stocks , Yale – private equity , hedge funds, real estate investments , etc. With the expand of the spectrum of instruments in which the funds are invested the income volatility increases either, and therefore the institutional investors should be both transparent and explain to the public the motives of investment strategy changes.

scholarly journals EVALUATION OF FINANCIAL PERFORMANCE USING VALUE ADDITION METRICS – A SELECT STUDY OF 'IT' COMPANIES IN INDIA

2017 ◽  
Vol 4 (37) ◽  
Author(s):  
S. PRATAP ◽  
J. REVATHY
Keyword(s):  
Shareholder Value ◽  
Economic Value ◽  
Value Added ◽  
Wealth Creation ◽  
Shareholder Returns ◽  
Accounting Data ◽  
Earnings Per Share ◽  
Market Value Added ◽  
Evaluation Techniques

In today’s competitive world, value and wealth creation for shareholders are among the most important goals of businesses. For the sake of achieving his goals, the investor needs some instruments in order to measure the potential value of each investment opportunity. It is clear that these instruments are not capable of predicting the exact future, they just provide some piece of information and advice that help the investor in the decisions he makes. Among these criteria, the most common types are Return on Investment (ROI) and Earnings per Share (EPS). Despite the numerous applications of these instruments, theoretically, they are not related with shareholders’ value or wealth creation. In recent years, the modern evaluation techniques based on economic theories such as Economic Value Added (EVA), Market Value Added (MVA) and Shareholder Value Added (SVA) replace the accounting data-based criteria and have widely drawn the attentions. These criteria follow the performance assessment with regard to the changes in the value and alongside maximizing the long term shareholder returns. In this research paper, one of the most important criteria; i.e. Shareholder Value Added (SVA), is investigated from several viewpoints.

The procurement dilemma: short-term savings or long-term shareholder value?

2016 ◽  
Vol 37 (6) ◽  
pp. 10-17 ◽  
Author(s):  
Michel Philippart
Keyword(s):  
Corporate Strategy ◽  
Reference Group ◽  
Shareholder Value ◽  
Potential Contribution ◽  
Competitive Advantages ◽  
Short Term ◽  
Content Type ◽  
Functional Perspective ◽  
The Impact

Purpose Research has shown the potential contribution of properly managed suppliers to the competitive position of firms. Major strategy schools of thought such as the industry view and the resource-based view have evolved in their perspective about supplier’s contributions, replacing a transactional perspective of supplier management with a more comprehensive view of their role in corporate strategy. This study aims to understand if procurement professionals have evolved in the same direction. Design/methodology/approach During a corporate wide assessment for a large consumer product corporation, the author had the opportunity to incorporate a four-statement question aimed at identifying the perception of value creation by different levels of procurement staff. The answers were compared with responses of a reference group that comprised business school students who had never been exposed to professional procurement as a function or skill. Findings The results show that buyers, even at senior levels, more clearly identify value as the result of price negotiation, a functional perspective, than as the construction of sustainable competitive advantages, the shareholder perspective. They do not discriminate sufficiently between short-term transactional value transfer and long-term shareholder value capture. Research limitations/implications The study was conducted on a sample of 500 people from four continents but limited to a single corporate environment. This study focused on innovation as a source of value and competitive advantages. Originality/value The paper shows to corporate deciders the impact of overly cost-focused procurement departments. This study reinforces their need to better balance the objectives assigned to their procurement team. This study outlines the steps necessary to align the cultural competitiveness of procurement to the objectives of the firm, with an extended enterprise scope.

Firm web visibility and its business value

2014 ◽  
Vol 24 (3) ◽  
pp. 292-312 ◽  
Author(s):  
Fang Wang ◽  
Liwen Vaughan
Keyword(s):  
Significant Relationship ◽  
Firm Value ◽  
Shareholder Value ◽  
Convincing Evidence ◽  
Business Value ◽  
Cross Sectional ◽  
Content Type ◽  
Web Visibility ◽  
Advertising Efficiency

Purpose – The purpose of this paper is to theoretically analyze and empirically test the business value of firm web visibility, including its relationship to advertising efficiency and long-term financial performance (i.e. shareholder value). Design/methodology/approach – A conceptual framework is established to analyze firm value of web visibility through its market effects. Hypotheses on the associations between firm web visibility and advertising efficiency and shareholder value are tested by cross-sectional analysis of 1,331 firms in six industries and four industry sectors. The authors control for several firm- and industry-level factors. Findings – The results consistently support the two hypotheses, i.e., first, a positive and significant relationship between firm web visibility and advertising efficiency; and second, a positive and significant relationship between firm web visibility and shareholder value. Practical implications – In addition to increasing web traffic, firm web visibility has business value and helps to enhance advertising efficiency and shareholder value. Managers can use the web references as a valuable tool for marketing success when the use of traditional advertising reaches saturation. Managers should actively monitor and use web visibility as a web management measure in practice. Originality/value – This research provides convincing evidence to support both short-term and long-term business value of web visibility and suggests that web visibility be recognized and managed as a market-based asset.

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