557 Hedge Fund Activism

How should society allow public shareholders to influence and control the decisions of corporate directors and managers? This course will explore shareholder activism by hedge funds, using an interdisciplinary approach that combines law, economics and policy.  We will discuss shareholder activism in the pre-hedge fund period, the emergence of activism by hedge funds, and the question of what different things hedge fund activists want target companies to do. We will also discuss empirical evidence on hedge fund activism, including stock market evidence on the success of activism, and the performance of companies that have been the target of activist campaigns. Throughout the class we will explore the many controversies in hedge fund activism, including whether hedge fund activism sacrifices long run success for the short run benefit of activists, and whether hedge fund activism should be subject to additional laws and regulation.

This is a credit/no credit course based on class participation, short (2-3 page) write-ups, and a final small group presentation on an activist campaign of the small group’s choice.

Course Areas of Practice
Course Type
Lecture
Learning Outcomes
Knowledge and understanding of substantive and procedural law
2016
Spring 2016
Course Number Course Credits Evaluation Method Instructor Meeting Day/Times Room

557.01 1

J.B. Heaton

F 10:00-12:00 PM (Jan 29 - Mar 4) and Mar 5, 10:00-12:00 PM 4042

This course will explore shareholder activism by hedge funds, using an interdisciplinary approach that combines law, economics and policy. We will start with an introduction to shareholder activism in the pre-hedge fund period, move on to the emergence of activism by hedge funds, and set up the question of what hedge fund activists want target companies to do.

We will then discuss empirical evidence on hedge fund activism, including the characteristics of activism targets and activist funds, the nature of activist campaigns, stock market evidence on the success of activism, and the performance of companies that have been the target of activist campaigns.

Finally, we will explore controversies in hedge fund activism, including whether hedge fund activism sacrifices long run success for the short run benefit of activists.

Throughout we will stress the problem of advising the activist and the target, using individual case studies where appropriate.

The text will be draft chapters of a book in-process for Oxford University Press by the instructor and two scholars in the field of hedge fund activism, along with other handouts. This is a credit/no credit course based on class participation, short (2-3 page write ups), and an oral, group presentation in the last class meeting.

Pre/Co-requisites
None
Enrollment Restrictions
None

*Please note that this information is for planning purposes only, and should not be relied upon for the schedule for a given semester. Faculty leaves and sabbaticals, as well as other curriculum considerations, will sometimes affect when a course may be offered.