"Since the after-fee returns of funds-of-funds are, on average, lower than hedge fund returns, it is easy to conclude that funds-of-funds do not add value compared to hedge funds. However, funds-of-funds should not be evaluated relative to hedge fund returns in publicly reported databases....

Since the after-fee returns of funds-of-funds are, on average, lower than hedge fund returns, it is easy to conclude that funds-of-funds do not add value compared to hedge funds. However, funds-of-funds should not be evaluated relative to hedge fund returns in publicly reported databases....

During the recent financial crisis, capital flow to hedge funds plunged, and competition among hedge fund managers intensified. This leads to a transfer of bargaining power from hedge fund managers to investors when negotiating fund managers' compensation contracts. We use a signaling game...

Hedge fund managers' risk-taking choices are determined by their compensation structure. Most existing studies focus on how the incentive fee and the high-water mark provision affect managers' risk-taking. We build a simple model to show that managers' risk-taking is negatively related to their...