Blockholder Disclosure Thresholds and Hedge Fund Activism

Guillem Ordóñez-Calafi, Dan Bernhardt

Research output: Contribution to journalArticlepeer-review


Blockholder disclosure thresholds shape incentives for hedge fund activism, which are jointly determined with real investment and managerial behavior. Uninformed investors value lower thresholds (greater transparency) when the cost of trading against an informed activist outweighs the benefits of the activist's disciplining of management. Conversely, activists may desire disclosure thresholds if the threat of their participation discourages managerial malfeasance, which is their source of profits. Hedge fund activism can be excessive: If market opacity sufficiently harms uninformed investors, the costs of reduced real investment outweigh the social benefits from managerial disciplining, and society benefits from lower thresholds.

Original languageEnglish (US)
Pages (from-to)2834-2859
Number of pages26
JournalJournal of Financial and Quantitative Analysis
Issue number7
StatePublished - Nov 30 2022

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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