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How Much Does Size Erode Mutual Fund Performance? A Regression Discontinuity Approach
Reuter, Jonathan - 2010
The level of diseconomies of scale in asset management has important implications for tests of manager skill and the expected level of performance persistence. To identify the causal impact of fund size on future returns, we exploit the fact that small differences in returns can cause discrete...
Persistent link: https://www.econbiz.de/10012462327
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Skill and Fees in Active Management
Stambaugh, Robert F. - 2019
Greater skill of active investment managers can mean less fee revenue in a general equilibrium. Although more …-skilled managers earn more revenue than less-skilled managers, greater skill for active managers overall can imply less revenue for … their industry. Greater skill allows managers to identify mispriced securities more accurately and thereby make better …
Persistent link: https://www.econbiz.de/10012479976
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Indirect Incentives of Hedge Fund Managers
Lim, Jongha - 2013
managers. Flows respond quickly and strongly to performance; lagged performance has a monotonically decreasing impact on flows … times as large as direct incentives from incentive fees and returns to managers' own investment in the fund. For new funds … generated for their investors in a given year, managers receive close to another dollar in direct performance fees plus the …
Persistent link: https://www.econbiz.de/10012459758
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Measuring Institutional Investors’ Skill from Their Investments in Private Equity
Cavagnaro, Daniel R. - 2016
Using a large sample of institutional investors' private equity investments in venture and buyout funds, we estimate the extent to which investors' skill affects returns from private equity investments. We first consider whether investors have differential skill by comparing the distribution of...
Persistent link: https://www.econbiz.de/10012456132
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Understanding Corporate Governance Through Learning Models of Managerial Competence
Hermalin, Benjamin E. - 2014
A manager's shareholders, board of directors, and potential future employers are continually assessing his ability. A rich literature has documented that this insight has profound implications for corporate governance because assessment generates incentives (good and bad), introduces assorted...
Persistent link: https://www.econbiz.de/10012458636
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Scale and Skill in Active Management
Pastor, Lubos - 2014
We empirically analyze the nature of returns to scale in active mutual fund management. We find strong evidence of decreasing returns at the industry level: As the size of the active mutual fund industry increases, a fund's ability to outperform passive benchmarks declines. At the fund level,...
Persistent link: https://www.econbiz.de/10012458773
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Measuring Managerial Skill in the Mutual Fund Industry
Berk, Jonathan B. - 2012
document that investors recognize this skill and reward it by investing more capital with skilled managers. Higher skilled … managers are paid more and there is a strong positive correlation between current managerial compensation and future …
Persistent link: https://www.econbiz.de/10012460476
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The Economic Value of Higher Teacher Quality
Hanushek, Eric A. - 2010
Most analyses of teacher quality end without any assessment of the economic value of altered teacher quality. This paper combines information about teacher effectiveness with the economic impact of higher achievement. It begins with an overview of what is known about the relationship between...
Persistent link: https://www.econbiz.de/10012462051
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Risk and the CEO Market : Why Do Some Large Firms Hire Highly-Paid, Low-Talent CEOs?
Edmans, Alex - 2010
This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and heterogeneous moral hazard. Each of the three outcomes can be summarized by a single closed-form equation. In assignment models without moral hazard, allocation depends only on firm size...
Persistent link: https://www.econbiz.de/10012462666
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The dark side of outside directors : Do they quit when they are most needed?
Fahlenbrach, Rüdiger - 2010
Outside directors have incentives to resign to protect their reputation or to avoid an increase in their workload when they anticipate that the firm on whose board they sit will perform poorly or disclose adverse news. We call these incentives the dark side of outside directors. We find strong...
Persistent link: https://www.econbiz.de/10012462735