Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World

Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World book cover

Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World

Author(s): Ronald D. Orol (Author)

  • Publisher: John Wiley & Sons
  • Publication Date: 6 Nov. 2007
  • Language: English
  • Print length: 370 pages
  • ISBN-10: 0470128003
  • ISBN-13: 9780470128008

Book Description

Activist hedge fund managers represent a small part of the $1.5 trillion hedge fund industry, but their approach is causing a stir among traditional managers and the investment community because they are shaking up the corporate establishment and making money for their investors. These types of managers are here to stay and Extreme Value Hedging tells the story of their rise to power in the U.S. and how they are spreading their influential gospel around the globe to places like China, Ukraine, South Korea and Sweden. Author Ronald D. Orol has a unique understanding of this world and through this book he shares his unparalleled insights in an easy to comprehend manner. He discusses everything from activist investor efforts to breakup the clubby insider world of corporate boardrooms to their deal–making or breaking pressure tactics and courtroom battles. Orol skillfully makes his case for each subject by offering revelations and examples from insiders like Ralph Whitworth, (Relational Investors), Guy Wyser–Pratte, (Wyser–Pratte Management), Mark Schwarz, (Newcastle Capital Group LLC), Robert Chapman (Chapman Capital), Phillip Goldstein (Opportunity Partners), Jeffrey Ubben (ValueAct Capital), Jeffrey M. Solomon (Ramius Capital Group LLC), Michael Van Biema (Van Biema Value Partners), Eric Rosenfeld (Crescendo Partners), Lars Förberg (Cevian Capital) and Emanuel Pearlman (Liberation Investment Group), among many, many others.

Editorial Reviews

Review

“a surprisingly entertaining read if you want to understand this phenomenon, and how it′s impacting our investments”
––bloggingbuyouts

“Orol examines how activist investors are impacting corporate boards through interviews with activist investors, money managers and corporate executives. He also predicts activist investors and corporate executives will soon be taking their battles online.”––RiskMetrics Group

From the Inside Flap

Activist hedge fund managers represent a small part of the $1.5 trillion hedge fund industry, yet the philosophy that drives them to earn above–average returns has caused a stir within the investment community and the corporate world. These types of managers are changing the investing landscape from banking and corporate finance to management and Extreme Value Hedging tells the story of their rise to power in the United States and the spread of their influence around the globe.

Despite their well–publicized status, very little is truly known about activist hedge funds. But author Ronald Orol has a unique understanding of this world, and with Extreme Value Hedging, he shares his unparalleled insights on how the individuals behind these funds are bucking the traditionally passive investor approach by actively initiating change that will improve the share value of today′s small, mid–size, and large corporations. Orol discusses everything from activist investor efforts to break up the clubby insider world of corporate boardrooms; to their deal–making or –breaking pressure tactics and courtroom battles.

Divided into three comprehensive parts, Extreme Value Hedging takes you inside a world that few have ever seen. Through the revelations and examples of those on the front lines of this movement, you′ll quickly discover where activists are coming from and how they operate; how institutional investors work with or against activists; and what the future may hold for them in places such as Russia, South Korea, and Japan.

You′ll hear from high–profile activist investors, such as Guy Wyser–Pratte, Ralph Whitworth, Lars Förberg, Phillip Goldstein, and Robert Chapman. With precision and clarity, Orol explains how the presence of activists is changing the way corporate directors and executives manage businesses and think about major deals.

Filled with distinct details of the emergence, development, and expansion of this discipline, Extreme Value Hedging provides you with an engaging account of how activist hedge fund managers are implementing innovative strategies to improve the shareholder value of target companies and achieve robust returns for their clients in the process.

Whether you want to learn how to profit from this alternative investment strategy or understand how activist investors continue to outperform the market, Extreme Value Hedging is the book for you.

From the Back Cover

Praise for Extreme Value Hedging

“An intelligent, well–researched, and very useful book. Experts and laymen alike will find it eye–opening.”
Jeffrey H. Birnbaum, The Washington Post

“Love them or hate them, activist hedge funds are having a significant impact on the American and global corporate economies. Ron Orol′s detailed and thoughtful book is required reading for anybody who wants to understand what these funds are, how they work, and the various good and bad effects they can have on corporate performance.”
Lawrence E. Mitchell, author, The Speculation Economy Theodore Rinehart Professor of Business Law at George Washington University

“Provides breadth, insight, and a worldwide perspective on one of our most dramatic capital market developments the rise of the activist hedge fund. The book is essential reading for those who want to understand the current economic scene.”
Harvey J. Goldschmid, Dwight Professor of Law at Columbia Law Schoolformer SEC Commissioner (2002–05)

“Ron Orol has produced an extremely interesting, very well–conceived, thoroughly researched, skillfully documented, highly informative, and cleverly written comprehensive look into the world of activist investors who work to bring out shareholder value in companies where it is hidden or where managements have gone to sleep, preferred to ′coast′ or are plainly indiffererent to shareholders. This book is a great compendium of such activist hedge fund managers and their escapades.”

Lawrence J. Goldstein, Santa Monica Partners

“Ron Orol is the modern–day Paul Revere, warning corporate directors and officers that activist shareholders are coming and informing previously passive investors how to capture and control the businesses they own. Ron explains with insight and examples the shareholder revolutionary army comprised of activist hedge funds supported by the media and Internet bloggers.”
Arthur F. Bell, Jr., Managing Member, Arthur F. Bell, Jr. & Associates, LLC

“Ron Orol′s deep network of contacts and his insight into shareholder activism make this book a must for anyone seeking to understand these enfants terribles of the capital markets.”
Boyd Erman, Capital Markets Reporter, The Globe and Mail

“A fascinating read on the David and Goliath interaction between a small group of activist investors and corporations of all sizes worldwide. Orol spares no details as he unlocks the secrets of how activist shareholders create dramatic change in today′s global investment marketplace.”
James G. Tompkins, PhD, Director of Board Advisory Services Corporate Governance Center, Kennesaw State University

About the Author

Ronald D. Orol is a senior writer for The Deal and The Daily Deal, covering the activist hedge fund industry as well as other topics, including the S.E.C. and Capitol Hill. Orol is author of the “Over the Hedge” column, contributor to the “Rules of the Road” weekly column, and is also a commentator on BBC World Television and National Public Radio. In addition, Orol regularly organizes and moderates panels on hedge funds and telecom reform for The Deal audience. Prior to his work at The Deal, he was a reporter with Dow Jones Newswires and a Washington correspondent for The Providence Journal. Before moving to Washington, Orol spent three years as a business and finance reporter for The Prague Post in the Czech Republic. While in Prague, Orol also reported on Eastern European privatization and the political transformation of the region for Southam News Wire Service. His articles appeared in the Montreal Gazette, the Toronto Star, and the Ottawa Citizen. Orol earned his bachelor of journalism honors degree from Carleton University in Ottawa. He also received a business and economics journalism master′s degree from Boston University, where he graduated with distinction.

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