The Good or the Bad? Which Mutual Fund Managers Join Hedge Funds?

Prachi Deuskar; Joshua Matthew Pollet; Z. Jay Wang; Lu Zheng

doi:10.1093/rfs/hhr057

The Good or the Bad? Which Mutual Fund Managers Join Hedge Funds?

Prachi Deuskar^1,2; Joshua Matthew Pollet^2,3; Z. Jay Wang^2,4; Lu Zheng⁵

¹ Indian School of Business · ² University of Illinois Urbana-Champaign · ³ Michigan State University · ⁴ University of Oregon · ⁵ University of California, Irvine

Review of Financial Studies 2011

Does the mutual fund industry lose its best managers to hedge funds? We find that mutual funds are able to retain managers with good performance in the face of competition from a growing hedge fund industry. On the other hand, poor performers are more likely to leave the mutual fund industry. A small fraction of these poor performers find jobs with smaller and younger hedge fund companies, especially when the hedge fund industry is growing rapidly. Analogously, a small fraction of the better-performing mutual fund managers are retained by allowing them to manage a hedge fund side-by-side.

DOI: 10.1093/rfs/hhr057
Volume: 24 (9)
Pages: 3008-3024
Language: en
Export: BibTeX
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