Delaware Journal of Corporate Law (DJCL), Vol. 40, No. 1, 2015. Activist hedge funds have revolutionized American companies, generating both excitement and criticism. This article suggests that a new market mechanism, a “super hedge fund,” would maintain the benefits of hedge fund activism while limiting its drawbacks. The super hedge fund would not really be a fund, but a contractual arrangement between a large group of institutional investors and a working group of financial experts. The task force would intelligently pool the power of institutional shareholders and then unleash its spur on target companies. Unlike current hedge fund activism, the super hedge fund would not require substantial funding or market transactions and would therefore be extremely efficient and very accessible. It is important to note that the super hedge fund mechanisms work in such a way that the fund`s incentives align closely with the interests of the target companies` long-term shareholders. Therefore, the new mechanism should address the demands of short-termism raised by the current activism of hedge funds.
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