Liquidity Restrictions on Investment Funds: Are they a Response to Behavioral Bias?

Malaquias, Rodrigo Fernandes; Pontes, Gleison de Abreu

doi:10.15728/bbr.2018.15.4.5

BBR

2018

DOI: 10.15728/bbr.2018.15.4.5

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Liquidity Restrictions on Investment Funds: Are they a Response to Behavioral Bias?

Rodrigo Fernandes Malaquias¹,

Gleison de Abreu Pontes²

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2023

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“…://doi.org/10.54372/pc.2023.v18.3543 PASSARELLI;MOURA, 2011;EID, 2014;DUARTE;MEDEIROS, 2016;PONTES, 2018). It is an investment category that involves many risk factors, without the commitment of concentrating on any factor in particular (ANBIMA, 2017), besides other characteristics such as the adoption of leveraged positions, derivatives operations and performance rate payment (MALAQUIAS; EID, 2013).…”

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confidence: 99%

Hedge funds and the market return

Cardoso

Monte-mor

Tardin

et al. 2023

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This paper investigates if the equity stake, along with hedge funds, generates value for target companies in highly concentrated markets, such as the Brazilian one. In a sample with 324 Brazilian companies listed in São Paulo Stock Market (B3) that are actively participating in the Anbima Hedge Fund Index (IHFA), between 2007 and 2016, we found that the equity stake of hedge funds generates value in Brazilian invested companies, despite the market being more concentrated. We capture the hedge fund effect on invested companies in terms of: (i) how much the firms’ market capitalization is maintained by hedge funds and its percentage change between t and t-1; (ii) how many funds invest in a determined company each period and its percentage change between t and t-1. We defined target firm value creation using two proxies: abnormal return and effective stock return. To derive our results, we performed linear regressions with funds’ fixed effects and a set of fund characteristics acting as controls. We found a positive and significant relationship between the equity stake of hedge funds and the value generation in invested companies, despite the Brazilian market being more concentrated. Our results suggest that the hedge fund activism is increasing in Brazil, with fund managers influencing firms’ decisions and corporate governance mechanisms.

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confidence: 99%

Hedge funds and the market return

Cardoso

Monte-mor

Tardin

et al. 2023

Perspectivas Contemporâneas

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Liquidity Restrictions on Investment Funds: Are they a Response to Behavioral Bias?

Cited by 1 publication

References 24 publications

Hedge funds and the market return

Hedge funds and the market return

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