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 … managers during crisis periods. Our model predicts that when bargaining power is on the investors' side, hedge fund managers …

Indirect incentives exist in the money management industry when good current performance increases future inflows of … direct incentives from incentive fees and managers' personal stakes in the fund. Combining direct and indirect incentives … ourunderstanding of incentives in the asset management industry …

expectations. Our model enables us to link the optimal trading strategy and the optimal volatility of the fund to the management … (2008) fail to find a general trend in hedge fund managers risk-taking behavior when their option is out of the money …

Indirect incentives exist in the money management industry when good current performance increases future inflows of … managers. Flows respond quickly and strongly to performance; lagged performance has a monotonically decreasing impact on flows … times as large as direct incentives from incentive fees and returns to managers' own investment in the fund. For new funds …