We examine the role of hedge funds as primary lenders to corporate firms. We investigate boththe reasons and the implications of hedge funds’ activities in the primary loan market. Weexamine the characteristics of firms that borrow from hedge funds and find that borrowers areprimarily firms...

In this paper, we identify and document the empirical characteristics of the key drivers ofconvertible arbitrage as a strategy and how they impact the performance of convertible arbitragehedge funds. We show that the returns of a buy-and-hedge strategy involving taking a longposition in...

We examine the determinants and consequences of changes in hedge fund fee structures.We show that fee changes are asymmetric with much greater incidence of fee increasescompared to fee decreases. We find that managers of younger and smaller funds are morelikely to increase fees after good...

This paper introduces two measures to investigate potential window-dressing behavior amongmutual fund managers. We show that unskilled managers that perform poorly are more likely towindow dress by strategically purchasing winner stocks and selling loser stocks near quarterends. Further, funds...

This paper studies the “confidential holdings” of institutional investors, especially hedge funds, where thequarter-end equity holdings are disclosed with a significant delay through amendments to the Form 13F.Our evidence supports hiding private information as the dominant motive for hedge...

This paper is a first study to formally analyze the biases related to self-reporting in the hedgefunds databases by matching the quarterly equity holdings of a complete list of 13F-filing hedge fundcompanies to the union of five major commercial databases of self-reporting hedge funds between...

This paper provides the first empirical test of the diversification of opinions theory and the groupshift theory using real business data. Our data set covers management teams and single managersof US equity mutual funds. Our results reject the group shift theory and support thediversification...

We examine overconfidence among equity mutual fund managers. While overconfidencehas been extensively documented among retail investors, evidence fromprofessional investors is scarce. Consistent with theories of overconfidence, we findthat fund managers trade more after good past performance....

We analyze the quality of macroeconomic survey forecasts. Recent findings indicate that theyare anchoring biased. This irrationality would challenge the results of a wide range ofempirical studies, e.g., in asset pricing, volatility clustering or market liquidity, which rely onsurvey data to...

We study the eect of the business cycle on optimal capital structure choice and thebenet to leverage. We propose a regime switching model with a state-dependentcash ow process to capture macroeconomic risk in a rm's cash ow. Our modelis parsimonious but still realistic and allows for a wide...