We examine whether stock-level options information drives mutual fund performance. Our paper is motivated by existing studies indicating that options prices or implied volatilities predict stock returns. We find that stock-implied volatility innovations forecast mutual fund performance....

Incentive fees exist in the hedge fund industry to solve the principal-agent problem. However, due to indirect incentives, there continues to be a misalignment between fund managers’ and investors’ interests. This paper analyzes whether investors are able to mitigate this agency problem by...

A hedge fund's capital structure is fragile because uninformed fund investors are highly loss sensitive and easily withdraw capital in response to bad news. Hedge fund managers, sharing common investors and interacting with each other through market price, sensitively react to other funds'...