Hedge fund gross U.S. Treasury (UST) exposures doubled from 2018 to February 2020 to $2.4 trillion, primarily driven by relative value arbitrage trading and supported by corresponding increases in repo borrowing. In March 2020, amid unprecedented UST market turmoil, the average UST trading hedge...

We show that mutual funds are more likely to hold and significantly overweight stocks of their broker banks. Correspondingly, funds’ proxy voting is biased towards management of their brokers in contentious proposals. Such voting bias has a material impact on voting outcomes. In return, client...

Private equity investors require accurate estimates for the market value of their investments to perform optimal fund allocations and correctly diversify their portfolios. Since private equity investments are mostly privately held and do not have an active market valuation, these estimates rely...

Using a novel return-based method to detect allocations of corporate bond offerings, which are underpriced on average, we find that mutual funds most active in the primary market generate significant alpha and outperform those that are less active. Our evidence suggests that underwriters direct...

Venture capital (VC) funds backed by large multi-fund families tend to perform substantially better due to cross-fund cash flows (CFCFs), a liquidity support mechanism provided by matching distributions and capital calls within a VC fund family. The dynamics of this mechanism coincide with the...

I investigate whether and how private equity fund managers (GPs) inflate their interim fund valuations (net asset values, or NAVs) during fundraising periods. Specifically, I study the extent to which the GPs inflate NAVs by managing valuation assumptions (e.g., valuation multiples), influencing...

Against the backdrop of COVID-19, we study how the interactions of mutual funds and dealers introduce fragility to the municipal bond market and carry lasting impacts. During the crisis, trading activities surge while dealers' liquidity provision plunges for mutual-fund-held bonds, leading to...

Lifetime incomes of private equity general partners (GPs) are affected by their current funds' performance not only directly, through carried interest profit-sharing provisions, but also indirectly by the effect of the current fund's performance on GPs' abilities to raise capital for future...

This paper extends the standard Merton portfolio choice model to include illiquid private equity funds. This is done in a realistic modeling framework where private equity funds cannot be traded during their entire bounded lifecycle and involve capital commitments and intermediate capital...