In an "activist risk arbitrage," a shareholder attempts to reshape an announced M&A through public campaigns, profi ting from improved terms. Activists target deals with low premiums, and those susceptible to managerial conflicts of interest, including going-private deals and deals upon which...

Using a comprehensive dataset of mutual funds' quarterly holdings of credit default swap (CDS) contracts during 2007-2011, we analyze the motives for and consequences of mutual funds' participation in the CDS market pre- and post-financial crisis. Consistent with theoretical work, funds resort...