In recent years, investors have increasingly delegated the management of their investment portfolios to institutional asset managers. The scale of such delegated investing and its development over time are apparent from the growth in the size of assets under management by different types of...

The distinguishing characteristic of the institutional asset management industry is that asset management activities involve a series of delegated processes, linking the “triangle” formed by invested funds, fund owners and fund managers. As a result, contractual structures that seek to align...

We study the relation between hedge fund equity holdings and measures of informational efficiency of stock prices derived from intraday transactions, as well as daily data. Our findings support the role of hedge funds as arbitrageurs who reduce mispricing in the market. Hedge funds invest in...

We examine the relation between changes in hedge fund stock holdings and measures of informational efficiency of equity prices derived from transactions data, and find that, on average, increased hedge fund ownership leads to significant improvements in the informational efficiency of equity...

This study presents a hedge fund portfolio choice model for an investor facing ambiguity. In the empirical section, we measure ambiguity as the cross-sectional dispersion in Industrial Production growth and in stock market return forecasts, and we construct the systematic ambiguity factors from...