Hedge fund incentives, management commitment and survivorship

Qiu, Judy and Tang, Leilei and Walter, Ingo (2018) Hedge fund incentives, management commitment and survivorship. Financial Markets and Portfolio Management. (https://doi.org/10.1007/s11408-018-0309-4)

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Abstract

Management ownership in hedge funds sends conflicting signals—signals which reduce investors’ perception of survivorship risk. We document that decisions on management ownership are purposely self-selected. Such decisions are most likely motivated by unique incentive mechanisms imbedded in hedge funds. We examine the impact of managerial ownership decisions on fund survivorship risk by accounting for unobserved fund manager motivations that affect both ownership decisions and survivorship risk. Our findings suggest that the conventional argument that having management commitment can reduce survival risk (and therefore align the interests between managers and investors) is significantly overstated. These results are robust to using alternative ownership measures and controlling for different samples.

  • Item type:Article
    ID code:64135
    Dates:
    Date
    Event
    8 May 2018
    Published
    8 May 2018
    Published Online
    8 May 2018
    Accepted
    Notes:This is a post-peer-review, pre-copyedit version of an article published in Financial Markets and Portfolio Management. The final authenticated version is available online at: https://doi.org/10.1007/s11408-018-0309-4
    Subjects:Social Sciences > Commerce > Accounting
    Department:Strathclyde Business School > Accounting and Finance
    Depositing user: Pure Administrator
    Date deposited:23 May 2018 13:10
    Last modified:09 Apr 2024 00:00
    URI:https://strathprints.strath.ac.uk/id/eprint/64135
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