Abstract

http://ssrn.com/abstract=1652050
 
 

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Price Support by Bank-Affiliated Mutual Funds


Benjamin Golez


University of Notre Dame

Jose M. Marin


Universidad Carlos III de Madrid

May 2014

AFA 2012 Chicago Meetings Paper

Abstract:     
Fund managers are double agents; they serve both fund investors and owners of management firms. This conflict of interest may result in trading to support securities prices. Tests of this hypothesis in the Spanish mutual fund industry indicate that bank-affiliated mutual funds systematically increase their holdings in the controlling bank stock around seasoned equity issues, at the time of bad news about the controlling bank, before anticipated price drops, and after non-anticipated price drops. The results seem mainly driven by bank managers’ incentives. Ownership of asset management companies thus matters and can distort capital allocation and asset prices.

Number of Pages in PDF File: 76

Keywords: Price support, conflict of interests, mutual funds, banks, secondary offerings

JEL Classification: G30, G23, G32, G28, G21, K22

working papers series


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Date posted: August 2, 2010 ; Last revised: May 7, 2014

Suggested Citation

Golez, Benjamin and Marin, Jose M., Price Support by Bank-Affiliated Mutual Funds (May 2014). AFA 2012 Chicago Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1652050 or http://dx.doi.org/10.2139/ssrn.1652050

Contact Information

Benjamin Golez
University of Notre Dame ( email )
256 Mendoza College of Business
Notre Dame, IN 46556-5646
United States
(574) 631-1458 (Phone)
HOME PAGE: http://business.nd.edu/BenGolez/
Jose M. Marin (Contact Author)
Universidad Carlos III de Madrid ( email )
CL. de Madrid 126
Madrid, Madrid 28903
Spain
HOME PAGE: http://www.josemarin.com
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