Are hedge funds registered in Delaware different?

Douglas Cumming, Na Dai and Sofia Johan

Journal of Corporate Finance, 2015, vol. 35, issue C, 232-246

Abstract: Delaware hedge funds exhibit significant differences in contractual structure in terms of higher management and incentive fees. Delaware funds are more likely to use high watermark provisions and less likely to invest their personal capital. Both the redemption notice periods and lock up periods are significantly longer for Delaware hedge funds. While Delaware hedge funds do not outperform or underperform funds registered elsewhere, fund flows are more sensitive to Delaware funds' prior performance and Delaware funds are more likely to be liquidated due to poor performance. Further, Delaware funds are more likely to increase risk after poor absolute performance.

Keywords: Hedge funds; Delaware; Law and finance (search for similar items in EconPapers)
JEL-codes: G23 G24 G28 K22 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:35:y:2015:i:c:p:232-246

DOI: 10.1016/j.jcorpfin.2015.09.003

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