Lu, Yan, Naik, N and Teo, Melvyn (2023) Diverse Hedge Funds. Review of Financial Studies, 37 (2). pp. 639-683. ISSN 0893-9454
Abstract
Hedge fund teams with heterogeneous educational backgrounds, academic specializations, work experiences, genders, and races, outperform homogeneous teams after adjusting for risk and fund characteristics. An event study of manager team transitions, instrumental variable regressions, and an analysis of managers who simultaneously operate solo- and team-managed funds address endogeneity concerns. Diverse teams deliver superior returns by arbitraging more stock anomalies, avoiding behavioral biases, and minimizing downside risks. Moreover, diversity allows hedge funds to circumvent capacity constraints and generate persistent performance. Our results suggest that diversity adds value in asset management.
More Details
Item Type: | Article |
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Subject Areas: | Finance |
Date Deposited: | 26 Sep 2023 09:03 |
Date of first compliant deposit: | 25 Sep 2023 |
Subjects: |
Indigenous groups Financial institutions Corporate culture |
Last Modified: | 05 Nov 2024 02:30 |
URI: | https://lbsresearch.london.edu/id/eprint/3044 |