Determinants of Hedge Fund Investment in Corporate Endgames

Ludwig Dobmeier, Renata Lavrova, B. Schwetzler
{"title":"Determinants of Hedge Fund Investment in Corporate Endgames","authors":"Ludwig Dobmeier, Renata Lavrova, B. Schwetzler","doi":"10.2139/ssrn.3712037","DOIUrl":null,"url":null,"abstract":"Under German law the corporate endgame process of obtaining full control over a company offers multiple investment opportunities for investors with high investment flexibility, and is therefore particularly attractive to hedge funds. This paper investigates the determinants of hedge fund investment in corporate endgame processes based on a sample of 76 endgame situations of publicly listed German companies and investment data of 326 hedge funds. Examining characteristics of investment targets, we find that hedge funds invest in companies with a non-dominant majority owner and high stake of index funds as latter’s inability to react in change of control situations creates a supportive investment environment for hedge funds. Hedge funds are most likely to invest after takeover consummation and before announcement of a new endgame transaction. Investigating the determinants of ongoing engagement after initial investment, we find that the presence of other institutional investors, especially hedge funds positively affects engagement likelihood, serving as a validation of the own investment approach. Abnormal performance and trading liquidity of target stock also positively affect hedge funds’ engagement. The results indicate that the endgame process in Germany is an attractive investment opportunity for hedge funds, while hedge fund involvement also adds complexity to the corporate control process.","PeriodicalId":11800,"journal":{"name":"ERN: Stock Market Risk (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2020-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Stock Market Risk (Topic)","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.3712037","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 1

Abstract

Under German law the corporate endgame process of obtaining full control over a company offers multiple investment opportunities for investors with high investment flexibility, and is therefore particularly attractive to hedge funds. This paper investigates the determinants of hedge fund investment in corporate endgame processes based on a sample of 76 endgame situations of publicly listed German companies and investment data of 326 hedge funds. Examining characteristics of investment targets, we find that hedge funds invest in companies with a non-dominant majority owner and high stake of index funds as latter’s inability to react in change of control situations creates a supportive investment environment for hedge funds. Hedge funds are most likely to invest after takeover consummation and before announcement of a new endgame transaction. Investigating the determinants of ongoing engagement after initial investment, we find that the presence of other institutional investors, especially hedge funds positively affects engagement likelihood, serving as a validation of the own investment approach. Abnormal performance and trading liquidity of target stock also positively affect hedge funds’ engagement. The results indicate that the endgame process in Germany is an attractive investment opportunity for hedge funds, while hedge fund involvement also adds complexity to the corporate control process.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
公司末期对冲基金投资的决定因素
根据德国法律,企业获得对一家公司的完全控制权的最后阶段为具有高度投资灵活性的投资者提供了多种投资机会,因此对对冲基金特别有吸引力。本文以76家德国上市公司的末期情况为样本,利用326家对冲基金的投资数据,研究了对冲基金在公司末期过程中的投资决定因素。通过分析投资对象的特征,我们发现对冲基金投资于非显性多数股东和指数基金高持股的公司,因为指数基金在控制权变化情况下无法做出反应,这为对冲基金创造了一个支持性的投资环境。对冲基金最有可能在收购完成后、新的终局交易宣布之前进行投资。在调查初始投资后持续参与的决定因素时,我们发现其他机构投资者(尤其是对冲基金)的存在对参与可能性产生了积极影响,从而对自己的投资方式起到了验证作用。目标股的异常业绩和交易流动性对对冲基金的参与也有正向影响。研究结果表明,德国的终局过程对对冲基金来说是一个有吸引力的投资机会,而对冲基金的参与也增加了公司控制过程的复杂性。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
自引率
0.00%
发文量
0
期刊最新文献
The Risk-Return Tradeoff Among Equity Factors Predictive Regressions under Arbitrary Persistence and Stock Return Predictability News and Trading After Hours High-Frequency Arbitrage and Market Illiquidity President’s Confidence and the Stock Market Performance
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1