Tuesday, November 11, 2014
Do Incentive Fees Signal Skill? Evidence from the Hedge Fund Industry
By Paul Lajbcygier, Department of Banking & Finance and Joe Rich, Department of Accounting and Finance at Monash University,
In their paper, the authors examine the relation between incentive fees and superior hedge fund performance. Their findings suggest that higher incentive fee funds take on more leverage and considerably more financial risk, while consequently suffering higher rates of attrition, but overall support the notion that incentive based fees act as a signal of superior skill.
Download the full article here.
From the November 2014 issue of Barclay's Insider Report. Accredited investors can subscribe to the full newsletter for free.
In their paper, the authors examine the relation between incentive fees and superior hedge fund performance. Their findings suggest that higher incentive fee funds take on more leverage and considerably more financial risk, while consequently suffering higher rates of attrition, but overall support the notion that incentive based fees act as a signal of superior skill.
Download the full article here.
From the November 2014 issue of Barclay's Insider Report. Accredited investors can subscribe to the full newsletter for free.
Labels: Barclay Insider Report, Barclay Insider Report Guest Article, hedge fund fees, hedge fund performance, incentive fees
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