Family Descent as a Signal of Managerial Quality: Evidence from Mutual Funds

Oleg Chuprinin and Denis Sosyura

The Review of Financial Studies, 2018, vol. 31, issue 10, 3756-3820

Abstract: Using data from individual Census records on the wealth of managers’ parents, we find that mutual fund managers from poor families outperform managers from rich families. We argue that managers born poor face higher entry barriers into asset management. Consistent with this view, managers born poor are promoted only if they outperform, while those born rich are more likely to be promoted for reasons unrelated to performance. Overall, we establish a first link between fund managers’ family descent and their ability to create value. Received December 8, 2016; editorial decision November 20, 2017 by Editor Andrew Karolyi. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web Site next to the link to the final published paper online.

Date: 2018
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