Journal article
Shareholder Activism in Small-Cap Newly Public Firms
FINANCIAL ANALYSTS JOURNAL
11 Dec 2023
Abstract
We examine a private dataset of engagements by a UK fund in small-cap newly public firms. The fund inherits unwanted holdings from disparate investors and earns fees liquidating its portfolio. It considers activism only when blocks cannot be exited efficiently. Engagements are with firms that have founder chairpersons or CEOs, other blockholders thought to be supportive, and few outside directors. Engagements are conducted behind-the-scenes, without involving other shareholders, are strikingly successful, and result in cumulative abnormal returns of 8% to 10% when objectives are met. The fund outperforms benchmarks, and we estimate that abnormal returns derive mostly from engagements rather than stock picking.
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Details
- Title
- Shareholder Activism in Small-Cap Newly Public Firms
- Publication Details
- FINANCIAL ANALYSTS JOURNAL
- Publisher
- ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD; ABINGDON
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Drexel University
- Web of Science ID
- WOS:001122399600001
- Scopus ID
- 2-s2.0-85180179426
- Other Identifier
- 991021861177504721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance