Publication Type
Journal Article
Version
acceptedVersion
Publication Date
8-2018
Abstract
Hedge funds managed by listed firms significantly under-perform funds managed by unlisted firms. The under-performance 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 under-performance, 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.
Keywords
Hedge funds, Initial Public Offering, Agency, Conflicts of interest, Short-termism
Discipline
Finance and Financial Management
Research Areas
Finance
Publication
Journal of Financial Economics
Volume
131
Issue
1
First Page
44
Last Page
60
ISSN
0304-405X
Identifier
10.1016/j.jfineco.2018.09.004
Publisher
Elsevier
Citation
SUN, Lin and TEO, Melvyn.
Public hedge funds. (2018). Journal of Financial Economics. 131, (1), 44-60.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5904
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/10.1016/j.jfineco.2018.09.004