Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 3 of 3
Full-Text Articles in Business
Responsible Hedge Funds, Hao Liang, Lin Sun, Song Wee Melvyn Teo
Responsible Hedge Funds, Hao Liang, Lin Sun, Song Wee Melvyn Teo
Research Collection Lee Kong Chian School Of Business
Hedge funds that endorse the United Nations Principles for Responsible Investment (PRI) underperform other hedge funds after adjusting for risk but attract greater investor flows, accumulate more assets, and harvest greater fee revenues. Consistent with an agency explanation, the underperformance is driven by PRI signatories with low environmental, social, and governance (ESG) exposures and is greater for hedge funds with poor incentive alignment. To address endogeneity, we exploit regulatory reforms that enhance stewardship and show that the ESG exposure and relative performance of signatory funds improve post reforms. Our findings suggest that some hedge funds endorse responsible investment to pander …
Hedge Fund Franchises, William Fung, David Hsieh, Narayan Naik, Melvyn Teo
Hedge Fund Franchises, William Fung, David Hsieh, Narayan Naik, Melvyn Teo
Research Collection Lee Kong Chian School Of Business
We investigate the growth strategies of hedge fund firms. We find that firms with successful first funds are able to launch follow-on funds that charge higher performance fees, set more onerous redemption terms, and attract greater inflows. Motivated by the aforementioned spillover effects, first funds outperform follow-on funds, after adjusting for risk. Consistent with the agency view, greater incentive alignment moderates the performance differential between first and follow-on funds. Moreover, multiple-product firms underperform single-product firms but harvest greater fee revenues, thereby hurting investors while benefitting firm partners. Investors respond to this growth strategy by redeeming from first funds of firms …
Hedge Fund Franchises, William Fung, David Hsieh, Narayan Y. Naik, Melvyn Teo
Hedge Fund Franchises, William Fung, David Hsieh, Narayan Y. Naik, Melvyn Teo
Research Collection Lee Kong Chian School Of Business
Duplicate, see https://ink.library.smu.edu.sg/lkcsb_research/5964/. We investigate the growth strategies of hedge fund firms. We find that firms with successful first funds are able to launch follow-on funds that charge higher performance fees, set more onerous redemption terms, and attract greater inflows. Motivated by the aforementioned spillover effects, first funds outperform follow-on funds, after adjusting for risk. The multiple-product growth strategy hurts investors while benefiting hedge fund firms; multiple-product firms underperform single-product firms but harvest greater fee revenues. Investors respond to this growth strategy by redeeming from first funds of firms with follow-on funds that do poorly. Moreover, skilled investors allocate …