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 …

We propose a model where investors hire fund managers to invest either in risky bonds or in riskless assets. Some … managers have superior information on the default probability. Looking at the past performance, investors update beliefs on … their managers and make firing decisions. This leads to career concerns which affect investment decisions, generating a …

-skilled managers produce larger expected total investment profits, and their portfolio weights correlate more highly with assets …' future returns. Becoming more skilled, however, can reduce a manager's expected profit if enough other managers also become … more skilled. The greater skill allows those managers to identify profit opportunities more accurately, but active …

Mutual fund managers can outperform the market by picking stocks or timing the market successfully. Previous work has … picking skills and little evidence of timing skills among successful managers. This paper estimates skill separately in booms … and recessions and finds that the extent to which managers focus on stock picking or market timing fluctuates with the …

We study the relation between mutual fund managers' family backgrounds and their professional performance. Using hand …-collected data from individual Census records on the wealth and income of managers' parents, we find that managers from poor families … deliver higher alphas than managers from rich families. This result is robust to alternative measures of fund performance …