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Hedge Fund Flows and Name Gravitas

47 Pages Posted: 23 Mar 2017 Last revised: 23 Jan 2018

Juha Joenväärä

University of Oulu - Economics; Imperial College London

Cristian Ioan Tiu

University at Buffalo; TIAA Institute

Date Written: January 15, 2018


We document that investors allocate more flows to hedge funds whose names exhibit gravitas - defined as a combination of words from geopolitics and economics, or suggesting power. The economic effects are relatively large: averaging across our models, adding one more word with gravitas to the name of the average fund brings more than a quarter million dollars more in quarterly flows. We also document that having a name with gravitas is associated with abnormal negative performance: high name gravitas funds have lower returns, alphas, Sharpe ratios and manipulation-proof performance measures, higher volatilities and maximum drawdowns as well as higher probabilities of extinction than the funds with lower name gravitas. Although we find evidence that investors learn about the true investment abilities of their funds and respond less to gravitas as they do so, the chasing gravitas behavior survives all these controls. From the point of view of hedge fund managers, we document that funds with more name gravitas report to fewer databases, suggesting that giving the fund a "good" name serves as an alternative form of marketing. Finally, we show that our results are robust to a generous battery of additional tests, including corrections for potential endogeneity issues or for whether the fund only accepts qualified investors.

Keywords: Hedge funds, Semantic content, Flows

JEL Classification: G11, G14

Suggested Citation

Joenväärä, Juha and Tiu, Cristian Ioan, Hedge Fund Flows and Name Gravitas (January 15, 2018). Available at SSRN: or

Juha Joenvaara (Contact Author)

University of Oulu - Economics ( email )


Imperial College London

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Cristian Ioan Tiu

University at Buffalo ( email )

238 Jacobs Management Center
Jacobs Hall, North Campus
Buffalo, NY NY 14260
United States
7166453299 (Phone)

TIAA Institute ( email )

8500 Andrew Carnegie Blvd
Charlotte, NC 28262
United States

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