Hedge Fund Firms

Entrepreneurs in Hedge Fund Firms

Entrepreneurs in Hedge Fund Firms

The concept of a private funding has no place without the figure of business agent. The market economy is not the context in which the employer can move but the condition of its own existence, its reason for being. The business figure is understandable only on the assumption of freedom, freedom which covers procurement of inputs, pricing and exploitation of the opportunities offered by the market.

The game ensures that free market economic agents through the selfish pursuit of their individual benefit, contributing unwittingly to the common good of the whole society, as if by an "invisible hand". The public sector is responsible for defining the performance of enterprises, in order to safeguard the general interests. Thus, the primary role of government should be to create an institutional framework to facilitate economic activity in general and business in particular (Oesterle, 2006).

In Entrepreneurial Shareholder Activism: Hedge Funds and Other Private Investors, April Klein and Emanuel Zur examined recent “confrontational activism campaigns” by “entrepreneurial shareholder activists” and concluded that such strategies generate “significantly positive market reaction for the target firm around the initial Schedule 13D filing date” and “significantly positive returns over the subsequent year.” The authors find that the filing of a 13D notice by an activist hedge fund is a catalytic event for a firm that heralds substantial positive returns in the stock. Klien and Zur found that “hedge fund targets earn 10.2% average abnormal stock returns during the period surrounding the initial Schedule 13D. Other activist targets experience a significantly positive average abnormal return of 5.1% around the SEC filing window. These findings suggest that, on average, the market believes activism creates shareholder value. Furthermore, our target abnormal returns do not dissipate in the 1-year period following the initial Schedule 13D. Instead, hedge fund targets earn an additional 11.4% abnormal return during the subsequent year, and other activist targets realize a 17.8% abnormal return over the year following the activists' interventions

While it is true that there is increasing interest and recognition of the business agent for his role in the creation of wealth, for their contribution to improving the standard of living of the population, employment generation or joint system production and trade, to this day does not exist in the literature a clear consensus on the most appropriate definition for the enterprise and the entrepreneur. In addition to the innovative role, the business agent performs two additional activities: the creation and discovery of new business opportunities and entrepreneurship, both developed by corporate actors in the market economy in a context of risk and uncertainty (Klein, & Zur, 2011). The existence of market opportunities, and subsequent operation, affect the outcome and economic growth.

The performance of the business itself, whose ultimate goal is to make profit, social repercussions. The competition it faces serve the employer requires goods and services of better quality and cheaper to consumers, and prints the economy a continuous creative dynamism that results in an enrichment of human freedom ...