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dc.contributor.authorAchleitner, Ann-Kristinen_US
dc.contributor.authorBetzer, Andréen_US
dc.contributor.authorGider, Jasminen_US
dc.date.accessioned2011-07-18T08:59:39Z-
dc.date.available2011-07-18T08:59:39Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/48434-
dc.description.abstractWe address the question of whether hedge fund and private equity investments in public firms are motivated by corporate governance improvements. As opposed to traditional financial investors both HF and PE are likely to have the incentives to alleviate agency conflicts. However, against the background of differences in their business models and organizational set ups, it remains an empirical question of whether they address the same or different agency conflicts. Studying HF and PE activities in a typical Continental European market like Germany promises to offer interesting insights about how HF and PE activities relate to the prevalence of family ownership, concentrated ownership structures and conflicts among majority and minority owners. We document empirical evidence that both HF and PE investments are driven by corporate governance improvements, but seem to address different types of agency conflicts. Whereas HF focus on firms with a lack of a controlling shareholder, in particular family shareholders, PE invest in firms which exhibit the potential to align manager-shareholder interests due to low managerial ownership. Both appear to address free cash flow problems differently. Aiming at dividend increases, HF tend use commitment devices that can be implemented over a short horizon. In contrast, PE are inclined to target firms which are particularly well-suited for a leverage increase because of low expected financial distress costs. This strategy requires a sufficiently long investment horizon.en_US
dc.language.isoengen_US
dc.publisherCenter for Entrepreneurial and Financial Studies (CEFS) Munichen_US
dc.relation.ispartofseriesCEFS working paper series 2008-11en_US
dc.subject.jelG34en_US
dc.subject.ddc330en_US
dc.subject.keywordprivate equityen_US
dc.subject.keywordhedge fundsen_US
dc.subject.keywordcorporate governanceen_US
dc.subject.stwPrivate Equityen_US
dc.subject.stwHedgefondsen_US
dc.subject.stwCorporate Governanceen_US
dc.subject.stwAktienmarkten_US
dc.subject.stwDeutschlanden_US
dc.titleDo corporate governance motives drive hedge funds and private equity activities?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn587947438en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:cefswp:200811-
Appears in Collections:CEFS Working Paper Series, Center for Entrepreneurial and Financial Studies, Technische Universität München

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