Publication Type
Working Paper
Version
publishedVersion
Publication Date
12-2016
Abstract
Hedge funds managed by listed firms significantly underperform funds managed by unlisted firms. The underperformance is more severe for funds with low manager deltas, poor governance, and no manager co-investment, or managed by firms whose prices are sensitive to earnings news. Notwithstanding the underperformance, listed firms raise more capital and harvest greater fee revenues than do comparable unlisted firms. The results cannot be explained by endogeneity, backfill bias, serial correlation, or manager manipulation, and are consistent with the view that, for asset management firms, going public weakens the alignment between ownership, control, and investment capital, thereby engendering conflicts of interest.
Keywords
Hedge funds, Initial Public Offering, Agency, Conflicts of interest, Short-termism
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
First Page
1
Last Page
47
Identifier
10.2139/ssrn.2883416
Publisher
SSRN
Citation
SUN, Lin and TEO, Melvyn.
Public hedge funds. (2016). 1-47.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5220
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2139/ssrn.2883416