Publication Type
Working Paper
Version
submittedVersion
Publication Date
2-2018
Abstract
Facial structure as encapsulated by facial width-to-height ratio (fWHR) maps onto masculine behaviors in males and may positively relate to testosterone. We find that high-fWHR hedge fund managers underperform low-fWHR hedge fund managers by 5.83% per year after adjusting for risk. Moreover, funds operated by high-fWHR managers exhibit higher operational risk, suffer from a greater asset-liability mismatch, and are more likely to fail. We trace the underperformance to high-fWHR managers’ preference for lottery-like stocks and reluctance to sell loser stocks. The results are robust to adjustments for sample selection, marital status, sensation seeking, and manager race, and suggest that investors should eschew masculine managers.
Keywords
hedge funds, alpha, testosterone, facial width-to-height, disposition effect, operational risk
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
First Page
1
Last Page
61
Identifier
10.2139/ssrn.3100645
Citation
LU, Yan and TEO, Melvyn.
Do Alpha males deliver Alpha? Facial structure and hedge funds. (2018). 1-61.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6211
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.3100645