Playing favorites: Conflicts of interest in mutual fund management

• 成果类型: Article
• 署名作者: Del Guercio, Diane; Genc, Egemen; Tran, Hai
• 署名单位: University of Oregon; Erasmus University Rotterdam; Erasmus University Rotterdam - Excl Erasmus MC; Loyola Marymount University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2017.04.012
• 发表日期: 2018
• 页码: 535-557
• 关键词: Conflicts of interest; Side-by-side management; Mutual funds; Hedge funds; Performance-based fees

摘要

We examine the performance of mutual funds whose managers simultaneously manage portfolios with performance-based incentive fees for three account types: mutual funds, hedge funds, and separate accounts. Importantly, our data set is free of selection bias because it is hand-collected from mandatory SEC filings. We find that only funds whose managers also manage hedge funds significantly underperform peer mutual funds. Moreover, underperformance begins only after fund managers begin to manage a hedge fund. We find that managerial incentives and opportunities for cross-subsidization explain variation in underperformance across funds, supporting the conflicts of interest hypothesis in the debate on side-by-side management. (C) 2018 Elsevier B.V. All rights reserved.