We estimate the risk-adjusted performance of Italian equity funds, using both net and gross returns (i.e., net returns plus management fees), employing single factor and multifactor benchmarks. With net returns, the funds' performance is not significantly different from zero. With gross returns, however, the performance is always positive, even when we use benchmarks which take account of the non-equity investments of the funds and measures which are not influenced by the market timing behavior of the portfolio managers. Our evidence supports the Grossman and Stiglitz's view of market efficiency, suggesting that informed investors are compensated for their information gathering.

In response to fundamental changes in regulation and technology, the financial industry is undergoing an unprecedented wave of consolidation. A growing body of empirical literature measures the efficiency gains from mergers and acquisitions; however there is little sense of how the results might depend on the country, industry and time period analyzed. In this paper we review critically works that cover the main sectors of the financial industry (commercial and investment banks, insurance and asset management companies) in the major industrialized countries over the last 20 years, searching for common patterns that transcend national and sectoral peculiarities. We find that consolidation in the financial sector is beneficial up to a relatively small size, but there is little evidence that mergers yield economies of scope or gains in managerial efficiency.