Which Institutional Investors Matter for Firm Survival and Performance?

We assess the diverse roles of institutional investors in impacting survival and performance of chronically underperforming firms and contrast the results for consistently overperforming firms. We find material differences in institutional investor roles between these two samples. Differentiating among institutional types, using common evaluation criteria, and controlling for prior performance and attrition bias provides insights unattainable by examining aggregated holdings or holdings of a single type. For underperformers, results are negative for activist pension funds and long-term institutions, positive for activist hedge funds and short-term institutions, and mixed for institutional blockholders. Differences between independent and gray institutions are not material