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Shareholder activism by hedge funds in a concentrated ownership environment: an empirical study for Germany

Author

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  • Maximilian Stadler
  • Dodo zu Knyhausen-Aufseß
  • Lars Schweizer

Abstract

This study seeks to extend hedge fund activism research to a country where the ownership structure is dominated by large major shareholders. Until now, studies about hedge fund activism mainly treated countries with dispersed ownership structures. Using an event study with 133 German hedge fund events between January 2000 and April 2008, we found that hedge fund activism shows significant positive short-term abnormal returns, which do not hold in the long term. It showed that family shareholders have a significant influence on the success of hedge fund activism. Moreover, it could be measured that hedge fund activism is especially successful if it tries to force the company to sell assets. This study provides empirical support for the influence of the ownership structure on the success of hedge fund activism. It indicates that large major shareholders impact hedge fund activism.

Suggested Citation

  • Maximilian Stadler & Dodo zu Knyhausen-Aufseß & Lars Schweizer, 2015. "Shareholder activism by hedge funds in a concentrated ownership environment: an empirical study for Germany," International Journal of Financial Services Management, Inderscience Enterprises Ltd, vol. 8(1), pages 58-82.
    • Handle: RePEc:ids:ijfsmg:v:8:y:2015:i:1:p:58-82
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    Cited by:

    1. Josef Bajzik & Tomas Havranek & Zuzana Irsova & Jiri Novak, 2023. "Do Shareholder Activism Announcements Affect Stock Prices? A Meta-Analysis," Working Papers 2023/17, Czech National Bank.
    2. Josef Bajzik, 2023. "Does Shareholder Activism Have a Long-Lasting Impact on Company Value? A Meta-Analysis," Working Papers 2023/10, Czech National Bank.
    3. Ben Arfa, Nouha & Karmani, Majdi & Labaronne, Daniel, 2017. "Antecedents of hedge fund activism in French listed target firms," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1315-1326.
    4. Bajzík, Josef & Havranek, Tomas & Irsova, Zuzana & Novak, Jiri, 2023. "Does Shareholder Activism Create Value? A Meta-Analysis," CEPR Discussion Papers 18233, C.E.P.R. Discussion Papers.
    5. Bajzik, Josef, 2023. "Is the role of shareholder activism in corporate governance overestimated?," Finance Research Letters, Elsevier, vol. 58(PC).

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