Reallocation of Mutual Fund Managers and Capital Raising Ability

Yue Xu ()
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Yue Xu: Aarhus University, Department of Economics and Business Economics, and CREATES, Postal: Fuglesangs Allé 4, 8210 Aarhus V, Denmark

CREATES Research Papers from Department of Economics and Business Economics, Aarhus University

Abstract: This paper establishes the fund manager’s capital raising ability as an important managerial skill that fund firms exploit to generate higher firm revenues. Fund firms reallocate fund managers with high capital raising ability to other funds with large outflows. Investors demand the capital raising ability of managers and reward it by investing more capital despite lower future alphas. A team with a larger experience difference between reallocated managers and existing managers attracts more capital inflows, suggesting that there is a synergy effect on the fund manager’s capital raising ability. JEL classification: G11, G14, G23 Key words: Mutual Fund, Manager, Fund Firm, Reallocation, Revenue

Pages: 33
Date: 2022-08-31
New Economics Papers: this item is included in nep-bec and nep-sbm
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