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 asset management firms raise more capital, by growing existing funds and launching new funds post listing, and harvest greater fee revenues than do comparable unlisted firms. The results 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.
Hedge funds, public firms, agency problems, conflicts of interest
Corporate Finance | Finance and Financial Management
2017 European Finance Association Meetings
Curran for IARIA
City or Country
SUN, Lin and TEO, Song Wee Melvyn.
Public hedge funds. (2017). 2017 European Finance Association Meetings. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/5617
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