Managerial structure in the hedge fund industry

Yuhao Chen, Huan Kuang and Bing Liang

Journal of Financial Intermediation, 2024, vol. 58, issue C

Abstract: This paper provides the first study on how management structure influences hedge fund performance and risk. We document that hedge funds less tied to traditional assets often choose solo management structures. Solo-managed funds outperform team-managed funds, exhibit better skills in market return, volatility, and crisis timing, and demonstrate greater activity in beta management, but have higher idiosyncratic and tail risks. They are also less likely to be liquidated, with fund flows less performance sensitive. Using a sample of switched funds, we find that fund performance, assets, and risk correlate with the management structure switching decision.

Keywords: Hedge funds; Managerial structure; Performance; Risk-taking; Fund flows (search for similar items in EconPapers)
JEL-codes: G23 M12 M54 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:58:y:2024:i:c:s1042957324000172

DOI: 10.1016/j.jfi.2024.101089

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