Fund managers can demand liquidity for their trading ideas or provide liquidity for others' ideas. We identify the roles of these motives using a database of the individual transactions by Canadian equity funds. Both the cost and subsequent performance of their buys decline after strong inflows,...

We analyze the effectiveness of hedge funds' high-water mark provisions (HWMs) at mitigating moral hazard and adverse selection, when the supply of capital is competitive. We show that the HWM does not allow better managers to distinguish themselves ex ante. Regarding moral hazard, we find that...

The literature predicts that the average skill level and productivity are higher in larger cities. Prior studies use workers' wage or education differentials to indirectly link city size and output. This article relates city size and productivity directly, using performance data of U.S. equity...