Mutual fund performance when parent firms simultaneously manage hedge funds

The Good or the Bad? Which Mutual Fund Managers Join Hedge Funds?

“…Agarwal, Boyson, and Naik (2009) study the performance of "hedged mutual funds," whereas Cici, Gibson, and Moussawi (2010) and Nohel, Wang, and Zheng (2010) investigate the potential conflicts of interest arising from the side-by-side management. Nohel et al (2010) find no conflicts of interest because mutual funds managed by side-by-side managers consistently outperform peer mutual funds after the manager enters the side-by-side arrangement.…”

Effects of Manager Characteristics on Portfolio Composition of Multimarket Funds

“…Em outra perspectiva, ao considerar que em muitos casos de investimentos os ativos ou estratégias podem ser similares, mas o conjunto de habilidades dos gestores pode ser diferente, pesquisadores (CICI; GIBSON;MOUSSAWI, 2010;NOHEL;WANG;ZHENG, 2010;DEUSKAR et al, 2011) têm considerado gestores de múltiplos fundos com foco em gestores que administram simultaneamente pelo menos um fundo mútuo e um fundo hedge, podendo essa gestão ser denominada de "side-by-side". Assim, Nohel, Wang e Zheng (2010), analisando os alfas de modelos de fatores, bem como os coeficientes agrupados de regressões em corte transversal, encontraram que os gestores de fundos mútuos "side-by-side" rotineiramente superam seus pares de fundos mútuos ao passo que os gestores de fundos hedge "side-by-side" não necessariamente apresentam um desempenho superior ao dos seus pares.…”

Mutual fund industry management structure, risk and the impacts to shareholders

“…Recently, finance literature has found conflicting results concerning the conflict of interest that may exist between fund management companies and shareholders (i.e. Chen & Chen, 2009;Cici, Gibson, & Moussawi, 2010;Ferris & Yan, 2009). While the fund management firms' primary objective is to maximize the level of assets under management and the associated fees, fund shareholders desire high risk adjusted returns at a low cost.…”

“…For example, rather than allocating the average price paid in a bundled trade, shares bought at the lowest price and shares sold at the highest price can be associated with one fund and not another (Cici et al, 2010). Fund managers can select which fund receives this favorable treatment based on the impacts to the current assets under management, compensation in fees, inflows and reported performance.…”