Capital Flows and Hedge Fund Regulation
35 Pages
Posted: 16 Apr 2008
Last revised: 21 Oct 2009
York University - Schulich School of Business
State University of New York at Albany - School of Business & Center for Institutional Investment Management
There are 2 versions of this paper
Date Written: September 1, 2008
Abstract
This paper introduces a cross-country law and finance analysis of the flow-performance relationship for hedge funds. The data indicate that distribution channels in the form of private placements and wrappers mitigate the impact of performance on fund flows. Distribution channels via investment managers and fund distribution companies enhance the impact of performance on fund flows. Funds registered in countries which have larger minimum capitalization requirements for funds have higher levels of capital flows. Funds registered in countries which restrict the location of key service providers have lower levels of capital flows. Further, offshore fund flows and calendar effects evidenced in the data are consistent with tax factors influencing fund flows. Our findings are robust to Heckman-selection effects for offshore registrants, among other robustness checks.
Keywords: Flow, Performance, Hedge Funds, Regulation, Law and Finance
JEL Classification: G23, G24, G28, K22
Suggested Citation:
Suggested Citation
Cumming, Douglas J. and Dai, Na, Capital Flows and Hedge Fund Regulation (September 1, 2008). 3rd Annual Conference on Empirical Legal Studies Papers. Available at SSRN: https://ssrn.com/abstract=1026683 or http://dx.doi.org/10.2139/ssrn.1026683
