Essays on asset management

Author

Lin SUN, Singapore Management UniversityFollow

Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

12-2016

Abstract

Hedge funds managed by listed firms significantly underperform funds managed by unlisted firms. We argue that since the new shareholders of a listed management company typically do not invest alongside the limited partners of the funds managed, the process of going public breaks the incentive alignment between ownership, control, and investment capital, thereby engendering agency problems. In line with the agency explanation, the underperformance is more severe for funds that have low manager total deltas, low governance scores, and no manager personal capital, or that are managed by firms whose stock prices are more sensitive to earnings news. Post IPO, listed firms aggressively raise capital by launching multiple new funds. Consequently, despite the underperformance, listed firms harvest greater fee revenues than do comparable unlisted firms. Investors continue to subscribe to hedge funds managed by listed firms as they appear to offer lower operational risk.

Keywords

hedge funds, IPO, Mispricing

Degree Awarded

PhD in Business (Finance)

Discipline

Business Administration, Management, and Operations | Strategic Management Policy

Supervisor(s)

TEO, Song Wee Melvyn

Publisher

Singapore Management University

City or Country

Singapore

Citation

SUN, Lin. Essays on asset management. (2016).
Available at: https://ink.library.smu.edu.sg/etd_coll_all/34

Copyright Owner and License

Author

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.