Recent Advances in Research on Hedge Fund Activism: Value Creation and Identification

Hedge fund activism emerged as a major force of corporate governance in the 2000s. By the mid-2000s, there were between 150 and 200 activist hedge funds in action each year, advocating for changes in 200-300 publicly listed companies in the United States. In this article, we review the evolution and major characteristics of hedge fund activism, as well as the short- and long-term impacts of the performance and governance of targeted companies. Though most of the analyses here are based on a comprehensive sample of over 2,000 activism events in the United States from 1994 to 2011, hand-collected by the authors from regulatory filings and news searches, this article covers all major studies on the topic, including those on markets outside of the United States.