Birds of a Feather – Do Hedge Fund Managers Flock Together?

Marc Gerritzen, Jens Carsten Jackwerth and Alberto Plazzi
Additional contact information
Marc Gerritzen: Berenberg
Jens Carsten Jackwerth: University of Konstanz - Department of Economics

No 16-10, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Mandatory filings for UK hedge funds allow analysis of the effect of managerial employment networks on investment behavior. Employment in the same firm leads to significantly more similar investment behavior in terms of raw returns, abnormal performance (alpha), systematic risk (beta), and residual returns. Employment at the same firm at the same time strengthens the results significantly. The joint effect accounts for about a fifth of the difference in investing behavior. Results are robust to fund and manager level controls, as well as to endogeneity concerns.

Keywords: hedge funds; social ties; networks; abnormal performance (search for similar items in EconPapers)
JEL-codes: G11 G20 G23 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016-02, Revised 2020-07
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Birds of a Feather: Do Hedge Fund Managers Flock Together? (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1610

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