Wolf Pack Activism

• 成果类型: Article
• 署名作者: Brav, Alon; Dasgupta, Amil; Mathews, Richmond
• 署名单位: Duke University; National Bureau of Economic Research; European Corporate Governance Institute; University of London; London School Economics & Political Science; University System of Maryland; University of Maryland College Park
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4131
• 发表日期: 2022
• 页码: 5557-5568
• 关键词: SHAREHOLDER ACTIVISM; institutional investors; Competition for flow; activist hedge funds

摘要

Blockholder monitoring is central to corporate governance, but blockholders large enough to exercise significant unilateral influence are rare. Mechanisms that enable moderately sized blockholders to exert collective influence are therefore important. Existing theory suggests that engagement by moderately sized blockholders is unlikely, especially when the blocks are held by delegated asset managers who have limited skin in the game. We present a model in whichmultiple delegated blockholders engage targetmanagement in parallel, that is, wolf pack activism. Delegation reduces skin in the game, which decreases incentives for engagement. However, it also induces competition over investor capital (i.e., competition for flow). We show that this increases engagement incentives and helps ameliorate the problem of insufficient engagement, although it can also foster excess engagement. Under competition for flow, the total amount of capital seeking skilled activistmanagers is relevant to engagement incentives, which helps to predict when and where wolf packs arise. Flow incentives are particularly valuable in incentivizing engagement by packswith smallermembers.