Abstract

http://ssrn.com/abstract=1707181
 
 

References (36)



 
 

Citations (5)



 


 



Capitalizing on Capitol Hill: Informed Trading by Hedge Fund Managers


Meng Gao


University of Illinois at Urbana-Champaign - Department of Finance

Jiekun Huang


University of Illinois at Urbana-Champaign - Department of Finance

August 2014

AFA 2012 Chicago Meetings Paper
Fifth Singapore International Conference on Finance 2011

Abstract:     
This paper examines the hypothesis that hedge fund managers gain an informational advantage in securities trading through their connections with lobbyists. Using datasets on the long-equity holdings and lobbyist connections of hedge funds from 1998 through 2012, we show that hedge funds outperform passive benchmarks by 63 to 87 basis points per month on their political holdings when they are connected to lobbyists. Furthermore, the political outperformance of connected funds decreased significantly after the STOCK Act became effective. Our study provides evidence on the transmission of private political information in financial markets and on the value of such information to financial market participants.

Number of Pages in PDF File: 61

Keywords: Hedge funds, lobbyists, informed trading, performance, information transfer

JEL Classification: G11, G23, G14

working papers series





Download This Paper

Date posted: November 13, 2010 ; Last revised: September 16, 2014

Suggested Citation

Gao, Meng and Huang, Jiekun, Capitalizing on Capitol Hill: Informed Trading by Hedge Fund Managers (August 2014). Fifth Singapore International Conference on Finance 2011 ; AFA 2012 Chicago Meetings Paper; Fifth Singapore International Conference on Finance 2011 . Available at SSRN: http://ssrn.com/abstract=1707181 or http://dx.doi.org/10.2139/ssrn.1707181

Contact Information

Meng Gao
University of Illinois at Urbana-Champaign - Department of Finance ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
Jiekun Huang (Contact Author)
University of Illinois at Urbana-Champaign - Department of Finance ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
HOME PAGE: http://www.huangjk.info
Feedback to SSRN


Paper statistics
Abstract Views: 12,400
Downloads: 987
Download Rank: 11,933
References:  36
Citations:  5

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.437 seconds