How private equity and (activist) hedge funds can help by reducing agency costs
May 4th, 2009 | Filed under: Private Equity, Today's Post
As the Financial Times observed today in a piece about “gathering confidence” in the hedge fund industry, “The role of hedge funds in the rebuilding of Wall Street is still being written.”
While this may sound like empty cheer leading, the hedge fund model might actually have a lot to contribute to the success of US corporations – this according to an interesting article by University of Oregon professor Robert Illig (published in the Fall 2008 Alabama Law Review).
Illig argues that the corporate oversight role often ascribed to institutional investors is not being adequately fulfilled since institutional investors (mutual and pension funds) are unable to charge performance fees: More…
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