TY - JOUR T1 - Hedge Fund Investments in Bankruptcy JF - The Journal of Alternative Investments SP - 51 LP - 60 DO - 10.3905/jai.2014.16.4.051 VL - 16 IS - 4 AU - Ben Branch AU - Min Xu Y1 - 2014/03/31 UR - https://pm-research.com/content/16/4/51.abstract N2 - The authors investigate the role and impact of hedge fund investors on bankrupt firms. They find that hedge funds provide liquidity for troubled firms and help enhance their profitability. Comparing the performances in post-bankruptcy to pre-bankruptcy levels, bankrupt firms with hedge fund involvement tend to be in better shape compared to the ones without any type of vulture investor involvement. On the other hand, firms having hedge funds among their investors show comparable results to those with other vulture investors, such as private equity funds. In addition, the improvements appear to take place only in the short run. The involvement of hedge funds does not guarantee better stock performance. Hedge funds appear to be more financial than strategic players, as they rarely help troubled firms go through a systematic restructuring to achieve sustainable improvements.TOPICS: Real assets/alternative investments/private equity, financial crises and financial market history, risk management ER -