The Role of Gender for the Risk-shifting Behavior of Hedge Fund and CTA Managers

2021 ◽  
pp. 102635
Author(s):  
Kobra Ahmadpour ◽  
Michael Frömmel
Keyword(s):  
Hedge Fund ◽  
Risk Shifting

Duration of poor performance and risk shifting by hedge fund managers

2019 ◽  
Vol 40 ◽  
pp. 35-47 ◽  
Author(s):  
Ying Li ◽  
A. Steven Holland ◽  
Hossein B. Kazemi
Keyword(s):  
Hedge Fund ◽  
Poor Performance ◽  
Risk Shifting ◽  
Fund Managers

Can Liquidity Risk Explain Diseconomies of Scale in Hedge Funds?

2017 ◽  
Vol 07 (02) ◽  
pp. 1750002
Author(s):  
Hany A. Shawky ◽  
Ying Wang
Keyword(s):  
Hedge Funds ◽  
Hedge Fund ◽  
Liquidity Risk ◽  
Fund Performance ◽  
Diseconomies Of Scale ◽  
Liquidity Crises ◽  
Using Data ◽  
Asset Size ◽  
Hedge Fund Performance

Using data from the Lipper TASS hedge fund database over the period 1994–2012, we examine the role of liquidity risk in explaining the relation between asset size and hedge fund performance. While a significant negative size-performance relation exists for all hedge funds, once we stratify our sample by liquidity risk, we find that such a relationship only exists among funds with the highest liquidity risk. Liquidity risk is found to be another important source of diseconomies of scale in the hedge fund industry. Evidently, for high liquidity risk funds, large funds are less able to recover from the relatively more significant losses incurred during market-wide liquidity crises, resulting in lower performance for large funds relative to small funds.

Derivatives Use and Risk Taking: Evidence from the Hedge Fund Industry

2011 ◽  
Vol 46 (4) ◽  
pp. 1073-1106 ◽  
Author(s):  
Yong Chen
Keyword(s):  
Risk Reduction ◽  
Risk Taking ◽  
Hedge Funds ◽  
Hedge Fund ◽  
Market Risk ◽  
Risk Shifting ◽  
Large Sample ◽  
Event Risk ◽  
Market State ◽  
Fund Industry

AbstractThis paper examines the use of derivatives and its relation with risk taking in the hedge fund industry. In a large sample of hedge funds, 71% of the funds trade derivatives. After controlling for fund strategies and characteristics, derivatives users on average exhibit lower fund risks (e.g., market risk, downside risk, and event risk), such risk reduction is especially pronounced for directional-style funds. Further, derivatives users engage less in risk shifting and are less likely to liquidate in a poor market state. However, the flow-performance relation suggests that investors do not differentiate derivatives users when making investing decisions.

The Evolution in the U.S. of Private Enforcement via Litigation and Monitoring Techniques

2015 ◽  
Author(s):  
James D. Cox ◽  
Randall S. Thomas
Keyword(s):  
United States ◽  
Hedge Funds ◽  
Hedge Fund ◽  
The United States ◽  
Private Enforcement ◽  
Governance System ◽  
Public Companies ◽  
Shareholder Litigation ◽  
Corporate Governance System

This chapter examines the evolution of private enforcement in the United States and the lessons that can be learned by German public companies from the experiences of their US counterparts. It first looks at the place of representative shareholder litigation within the US corporate governance system before turning to the broad-based criticisms against all forms of representative shareholder litigation on the grounds of excessive litigation agency costs. It then discusses the role of shareholder derivative suits in remedying breaches of duty of loyalty, along with the use of hedge funds in shareholder monitoring. It explores the increasing role of appraisal remedy against the backdrop of developments in shareholder litigation focused on acquisitions, and highlights the limitations of hedge fund activism. Finally, it assesses the implications of shareholder monitoring mechanisms in the United States for shareholders in Germany.

The Role of Activist Hedge Funds in Financially Distressed Firms

2015 ◽  
Vol 50 (6) ◽  
pp. 1321-1351 ◽  
Author(s):  
Jongha Lim
Keyword(s):  
Hedge Funds ◽  
Hedge Fund ◽  
Distressed Firms ◽  
Financially Distressed

AbstractIn this paper I investigate the role of activist hedge funds in the restructuring of a sample of 469 firms that attempted to resolve distress either out of court, in conventional Chapter 11, or via prepackaged restructuring. Activist hedge funds strategically gain a position of influence in the restructuring of economically viable firms with contracting problems that prevent efficient restructuring without outside intervention. I find that hedge fund involvement is associated with a higher probability of completing prepackaged restructurings, faster restructurings, and greater debt reduction. Overall, the evidence in this article suggests that activist hedge funds can create value by enabling more efficient contracting.

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