Preprint
When Stocks are Illiquid: Activism as a Strategy of Last Resort
SSRN
2022
Abstract
We study a UK fund that acts as a liquidity provider for investors in small-cap stocks. Investors tender their holdings in exchange for shares in the fund. The fund has no say in which stocks it receives and earns fees liquidating the portfolio and returning cash within a three-year period. We find that the fund engages in voice only when holdings are very illiquid. Engagements are behind-the-scenes, with no collaboration with other activists, and take about two years to complete. They give rise to abnormal stock returns as high as 10 percent when objectives are met
Metrics
1 Record Views
Details
- Title
- When Stocks are Illiquid
- Creators
- Emmanuel PezierPaolo F Volpin
- Publisher
- SSRN
- Number of pages
- 1 Online-Ressource (48 p)
- Resource Type
- Preprint
- Language
- English
- Academic Unit
- Finance
- Identifiers
- 991021862288804721