Death and the life hereafter: A study of the subsequent hedge funds

Juan Yao, Bochen Wu and Yang Gao

Finance Research Letters, 2021, vol. 40, issue C

Abstract: Identifying skilled managers is crucial for investors. In this paper, we present a sample of hedge fund managers who launched new funds after their previous funds were closed or stopped reporting. We investigate the characteristics and performance of such managers’ subsequent funds (‘new’ funds) in comparison to their prior funds (‘old’ funds). After controlling for various fund characteristics and a peer group benchmark, we conclude that subsequent funds run by the same manager perform better than their prior counterpart by 1.2% per month on average. We conjecture that the outperformance is due to improved manager skills.

Keywords: Hedge funds; Performance measurement; Factor models; Subsequent funds (search for similar items in EconPapers)
JEL-codes: G12 G14 G23 G24 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:40:y:2021:i:c:s1544612320310850

DOI: 10.1016/j.frl.2020.101704

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