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Shareholder Activism in Small-Cap Newly Public Firms

Pezier, E. & Volpin, P. ORCID: 0000-0002-9287-0972 (2023). Shareholder Activism in Small-Cap Newly Public Firms. Financial Analysts Journal, 80(2), pp. 52-73. doi: 10.1080/0015198X.2023.2283445


We examine a private dataset of engagements by a UK fund in small-cap newly public firms. The fund inherits unwanted holdings from disparate investors and earns fees liquidating its portfolio. It considers activism only when blocks cannot be exited efficiently. Engagements are with firms that have founder chairpersons or CEOs, other blockholders thought to be supportive, and few outside directors. Engagements are conducted behind-the-scenes, without involving other shareholders, are strikingly successful, and result in cumulative abnormal returns of 8% to 10% when objectives are met. The fund outperforms benchmarks, and we estimate that abnormal returns derive mostly from engagements rather than stock picking.

Publication Type: Article
Additional Information: This is an Accepted Manuscript of an article published by Taylor & Francis in Financial Analysts Journal on 11 Dec 2023, available at:
Publisher Keywords: shareholder activism, corporate governance, institutional investors, small-caps, IPOs
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Departments: Bayes Business School
Bayes Business School > Finance
SWORD Depositor:
[thumbnail of ssrn-3400918.pdf] Text - Accepted Version
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