Workshop Series: Patrick Verwijmeren
By buying convertibles and shorting stock hedge funds distribute equity exposure to well-diversified shareholders. We find that a higher fraction of a convertible is privately-placed with hedge funds when seasoned equity offerings would be expensive. Hedge fund involvement also increases when institutional ownership, stock liquidity, issue size, limitations on callability and concurrent stock repurchases suggest that shorting costs will be lower. Discounts are not higher on convertibles issued to hedge funds, which is in line with hedge funds serving as relatively low-cost distributors rather than investors of last resort.
Patrick Verwijmeren is a Lecturer at the Department of Finance of the University of Melbourne. He has obtained both his Master's and PhD at RSM Erasmus University Rotterdam, the Netherlands. Part of his Master's program was fulfilled in an exchange with the Copenhagen Business School, and part of his PhD was fulfilled at Owen Graduate School of Management, Vanderbilt University. Patrick specializes in convertible securities and capital structure. His work has been presented at several international conferences, and he has (forthcoming) publications in Financial Management, Journal of Banking and Finance, Urban Studies, Applied Financial Economics, and Accounting in Europe. Patrick has also been involved in writing a report for the Dutch Ministry of Finance, dealing with the influence of hedge funds and private equity in the Netherlands.