Intra-Industry Effects of Shareholder Activism in Germany – Is There a Difference between Hedge Fund and Private Equity Investments?

Wirtschaftswissenschaften

Mietzner, Mark, Schweizer, Denis, Tyrell, Marcel

Intra-Industry Effects of Shareholder Activism in Germany – Is There a Difference between Hedge Fund and Private Equity Investments?

Mietzner, Mark, Schweizer, Denis, Tyrell, Marcel: Intra-Industry Effects of Shareholder Activism in Germany – Is There a Difference between Hedge Fund and Private Equity Investments?, Schmalenbach Business Review (sbr), 2011; Jg. 63 (2): 151-185.

Originalarbeiten in wissenschaftlichen Fachzeitschriften mit Review-Verfahren

We investigate the valuation effects of industry rivals on German firms targeted by hedge funds and private equity investors. We argue that both types of investors differ from other blockholders due to their strong motivation and ability to actively engage and monitor. We find that the announcement of a change in ownership structure generates statistically significant short- and long-term intra-industry effects for rivals to the respective private equity and hedge fund targets. However, these effects differ markedly between hedge fund investments and private equity investments. We conclude that hedge funds are more aggressive than private equity investors in implementing a shareholder orientation.

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