Alternative Marketing for Alternative Investments
University of Florida
David K. Musto
University of Pennsylvania - Finance Department
University of Florida - Warrington College of Business Administration
Hedge funds have been banned from advertising directly, but may have gained from advertising indirectly. We analyze the advertisements for hedge funds’ parent institutions and sibling mutual funds, and we ask whether and how the hedge funds motivated or benefitted from the ads. We find that the ads both respond to sagging cash flows and bring in new money. We also find that the ads predict a higher likelihood of large losses. These findings demonstrate both the efficacy and the potential danger of indirect advertising of financial services.
Number of Pages in PDF File: 45
Keywords: Hedge fund, advertising banworking papers series
Date posted: May 4, 2013 ; Last revised: October 13, 2013
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