Hedge Funds, Corporate Governance, and Information Acquisition

Ph.D. Candidate Tanja Kirmse of the Finance Department will be defending her Dissertation Proposal titled, “Hedge funds, corporate governance, and information acquisition” on 04/19/2022.

The time and location of her proposal defense is 11am - 12pm, GHALL 722.

Many thanks to Tanja’s dissertation committee:

• Committee Chair: Michelle Lowry - TD Bank Endowed Professor of Finance - Drexel University • Committee Member: Naveen Daniel - Associate Professor of Finance - Drexel University • Committee Member: Eli Fich - Trustee Professor of Finance - Drexel University • Committee Member: Greg Nini - Associate Professor of Finance - Drexel University • Committee Member: Nicole Boyson - Professor of Finance - Northeastern University

Abstract: A portion of hedge funds’ engagement can be observed through their votes and regulatory filings. However, much of their communication occurs through direct interaction with management, which is not formally recorded. I use SEC EDGAR log file data to proxy for such engagements. This proxy indeed captures hedge fund interest: one hedge fund click more than doubles the probability of an activism event. Moreover, consistent with hedge fund clicks proxying for behind-the-scenes engagement, these clicks predict corporate governance changes, for example CEO and director turnover, even in the absence of a formal activist filing. This finding provides evidence that hedge fund activism is farther reaching and more effective than previous literature has shown.