Investment fund voting in Brazilian public companies
Palavras-chave:
Investment funds, Mutual funds, Voting, Deference, Equity holdings, Corporate governance, Shareholder activismResumo
How do investment fund managers vote their shares in public companies? In the United States, this answer is well known. Research in empirical law and finance shows that U.S. funds (especially index funds) mostly defer to insider management’s position on issues put up to a shareholder vote. This support may waver when it comes to key issues such as executive compensation but remains solid across the board, to say the least. In Brazil, the answer, prior to this article, was unknown. In it, I exploit certain loopholes in publicly available disclosures by Brazilian public companies to match votes to funds, and thereby gauge overall deference by Brazilian investment funds in relation to their equity holdings in Brazilian public companies. I conclude that Brazilian fund managers are generally very much deferential to firm managers and controlling shareholders, though marginally less so than other shareholders, especially when individual votes, and not aggregate equity holdings, are considered.
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