Thu, Aug 25, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Academic research reveals hedge funds more like 'guardian angels’ than 'vultures’

Wednesday, May 09, 2012

Beverly Chandler, Opalesque London: Latest research from academics Wei Jiang, Kai Li, and Wei Wang from Columbia University, University of British Columbia and Queens University respectively shows that – contrary to popular opinion – hedge funds have a positive influence when investing in U.S. companies filing for Chapter 11 bankruptcy.

The study, co-authored by Sauder School of Business finance Prof. Kai Li, Hedge Funds and Chapter 11 and published in The Journal of Finance, reveals that when a hedge fund invests in a distressed company, other creditors in the transaction fare better and there is a greater chance a company will emerge from bankruptcy.

"It’s a common view in the media and popular opinion that hedge funds are 'vulture investors’ who dismantle companies to maximize profits in the shortest time-frame possible," says Li. "We found the opposite is true. Our data show that hedge funds strategically invest in troubled companies with the intention of becoming major shareholders after they emerge from bankruptcy. They are motivated to strengthen firms, not tear them apart."

Unlike mutual funds and pension funds, which have very stringent requirements on the types of companies in which they can invest, hedge funds are able to take on ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. LatAm hedge funds surge in 1H to +24.4%, emerging markets assets rise[more]

    Komfie Manalo, Opalesque Asia: Hedge funds investing in Latin America posted strong gains through mid-2016, reversing declines in four of the past five years, including the last three years, to lead all areas of hedge fund performance through the first half of 2016, according to the latest HFR Em

  2. Asia - LGT Capital Partners: Alternatives set for continued rise in Asia[more]

    From Asianinvestor.net: More flows are likely into insurance-linked strategies, private equity and trend-following strategies/CTAs, given the benefits of such investments, argues LGT Capital Partners. Despite the numerous quantitative easing programs and bailouts of recent years, the quest for

  3. Investors yank money from hedge funds after poor performance[more]

    From Marketwatch.com: A growing exodus from hedge funds extended to two of the biggest names in the industry Tuesday, Tudor Investment Corp. and Brevan Howard, as disenchanted investors increasingly shun what was once the hottest place to put money. The funds’ problem is clear: They just aren’t perf

  4. Banks look at hedge funds differently - and it should matter to allocators[more]

    From Valuewalk.com: Looking at two bank reports on the same topic can often yield interesting results. There are times when bank research is best viewed from the standpoint of how their analysis does or does not correlate with one another. Regarding hedge fund allocation decisions, one bank appears

  5. Legal - Hedge fund’s fixer kept deals flowing with bribes, U.S. says, Big four banks sued by U.S. hedge funds over BBSW, Lessons for hedge fund managers from the government's failed prosecution of alleged insider trading[more]

    Hedge fund’s fixer kept deals flowing with bribes, U.S. says From Bloomberg.com: With the Miami villa, stopovers at New York’s Plaza Hotel and millions channeled in bribes to win mining deals, Samuel Mebiame was the relationships guy in a corruption scheme that spanned continents, accord