作者：Aragon, George O.; Chung, Ji-Woong; Kang, Byoung Uk
作者单位：Arizona State University; Arizona State University-Tempe; Korea University; Hong Kong Polytechnic University
摘要：Using the setting of funds of hedge funds (FoFs), we show that prime brokers (PBs) facilitate investors' search for informed hedge fund managers. We find that FoFs exhibit PB bias, a disproportionate preference for hedge funds serviced by their connected PBs. This PB bias is strongerwhen the cost of hedge fund due diligence is higher relative to capital and when the FoF's management firm generates higher prime brokerage fees. PB bias also predicts FoF performance: the highest PB-bias quartile ...
