Abstract

http://ssrn.com/abstract=2103737
 
 

Footnotes (39)



 


 



Asset Owners and Delegated Managers


Andrew Ang


Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

July 6, 2012


Abstract:     
Asset owners (principals) typically do not manage their own investments and leave this job to delegated managers (agents). What is best for the asset owner, however, is usually not best for the fund manager. Additional agency conflicts arise when the asset owner does not know the quality and cannot infer the actions of the agent. Principal-agent conflicts can be mitigated by appropriate governance structures and contracts. The benchmark choice is important because poorly designed benchmarks in delegated asset management problems cause agents to work against what the asset owner wishes to achieve. In cases where there are many principals, effective boards can advocate for the principals’ interests, and boards should build processes for investment decisions rather than actively making direct investment decisions.

Number of Pages in PDF File: 40

Keywords: Principal-agent, Boards, Delegated portfolio management, Benchmark, Optimal Contract

JEL Classification: D81, D82, G11, G12, G20, G34, M52

working papers series





Download This Paper

Date posted: July 11, 2012  

Suggested Citation

Ang, Andrew, Asset Owners and Delegated Managers (July 6, 2012). Available at SSRN: http://ssrn.com/abstract=2103737 or http://dx.doi.org/10.2139/ssrn.2103737

Contact Information

Andrew Ang (Contact Author)
Columbia Business School - Finance and Economics ( email )
3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 2,009
Downloads: 576
Download Rank: 25,946
Footnotes:  39

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.375 seconds