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Trust and Delegation
Brown, Stephen - 2009
Due to imperfect transparency and costly auditing, trust is an essential component of financial intermediation. In this paper we study a sample of 444 due diligence (DD) reports from a major hedge fund DD firm. A routine feature of due diligence is an assessment of integrity. We find that...
Persistent link: https://www.econbiz.de/10012463120
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Finance and the Preservation of Wealth
Gennaioli, Nicola - 2013
We introduce the model of asset management developed in Gennaioli, Shleifer, and Vishny (2012) into a Solow-style neoclassical growth model with diminishing returns to capital. Savers rely on trusted intermediaries to manage their wealth (claims on capital stock), who can charge fees above costs...
Persistent link: https://www.econbiz.de/10012459544
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Money Doctors
Gennaioli, Nicola - 2012
investment, and allows managers to charge higher fees to investors who trust them more. Money managers compete for investor funds … by setting their fees, but because of trust the fees do not fall to costs. In the model, 1) managers consistently … involve sharing of expected returns between managers and investors, with higher fees in riskier products, 3) managers pander …
Persistent link: https://www.econbiz.de/10012460486