The Economics of Hedge Fund Startups: Theory and Empirical Evidence
| Autor: | Grant V Farnsworth, Charles Cao, Hong Zhang |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
040101 forestry
Economics and Econometrics Stylized fact 050208 finance Ex-ante business.industry 05 social sciences 04 agricultural and veterinary sciences Monetary economics Hedge fund Incentive Accounting 0502 economics and business 0401 agriculture forestry and fisheries Organizational structure Business Empirical evidence Accredited investor Finance |
| Zdroj: | The Journal of Finance. 76:1427-1469 |
| ISSN: | 1540-6261 0022-1082 |
| Popis: | This paper examines how market frictions influence the managerial incentives and organizational structure of new hedge funds. We develop a stylized model in which new managers search for accredited investors and have stronger incentives to acquire managerial skill when encountering low investor demand. Fund families endogenously arise to mitigate frictions and weaken the performance incentives of affiliated new funds. Empirically, based on a TASS‐HFR‐BarclayHedge merged database, we find that ex ante identified cold inceptions facing low investor demand outperform existing hedge funds and hot inceptions facing high demand and that cold stand‐alone inceptions outperform all types of family‐affiliated inceptions. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|