Hedge Funds

Master's Thesis from the year 2006 in the subject Business economics - Law grade: A- (German: Sehr Gut 15) University of Frankfurt (Main) (The Institute for Law and Finance) course: LL.M. (Finance) language: English abstract: This paper investigates 'activist investing' as adopted by some institutional investors and hedge funds and explores the resulting impact on the decision-making and corporate governance processes of the companies in which they invest. Firstly it suggests that although activist investing has become something of a fad and its benefit to firm performance is still disputed investors' attitudes have changed and acceptance of the strategy is growing. Secondly it posits that hedge funds in keeping with their respective financial size and available resources will continue to apply this strategy with three key objectives in mind namely: (i) To unlock value for short-term profit gains; (ii) To support a quasi-long-only medium-term (circa. 7 years) investment diversification strategy; (iii) To acquire businesses for the building of conglomerate industrial groups of companies i.e. forging King Cong funds.For a more thorough introduction to hedge funds in general readers are invited to read my earlier study titled:The Challenge of reigning-in Hedge Funds through Regulation and the Need to improve Disclosure Requirements. the latter looks at:1. Lack of transparency as a key feature of hedge fund investment2. Benchmarking and Performance Measurement error3. Risk management challenge presented by investing in hedge funds4. Management Fees and their relation to performance and risk5. Index funds & Fund of funds and their diversification advantages over hedge funds and other key topics