Corporate Governance: The Role of Sovereign Wealth Funds as Blockholders
Speaker
Abstract
| Using a large hand-collected data set from 1996 to 2006, we find that Sovereign Wealth Funds (SWFs) and their investment arms engage in blockholder activism through proposal of strategic, operational, and financial remedies. SWFs seldom seek control and in most cases are non-confrontational. The abnormal return around the announcement of activism is approximately 9%, with no reversal during the subsequent year. Target firms experience substantial increase in share price during the SWF holding period, as a result of improved management after activism. Our analysis provides important new evidence about the role of SWFs in informed shareholder monitoring. |
| The Brown Bag Seminars are sponsored by ERIM. For an outline of forthcoming seminars see http://people.few.eur.nl/gryglewicz/brownbag.htm |
| Contact information: |
| Sebastian Gryglewicz |
