Reputation Concerns and Slow-Moving Capital

36 Pages Posted: 30 Oct 2008 Last revised: 15 Aug 2018

See all articles by Steven G. Malliaris

Steven G. Malliaris

University of Georgia - Department of Banking and Finance

Hongjun Yan

DePaul University

Date Written: March 18, 2015


Our paper shows that fund managers' reputation concerns induce a preference over the skewness of strategy returns. This preference is non-monotonic in the manager's reputation level: While managers with average reputations prefer negatively skewed strategies, those with very high or very low reputations prefer the opposite. Our model also explains why only negatively skewed strategies tend to suffer from slow-moving capital: A subtle but natural consequence of adopting negatively skewed strategies is that after poor performance, managers' reputations recover slowly. In the meantime, they are unable to raise capital, leaving attractive opportunities unexploited.

Keywords: Reputation, Slow-moving capital, Career concern

JEL Classification: G11, G23

Suggested Citation

Malliaris, Steven G. and Yan, Hongjun, Reputation Concerns and Slow-Moving Capital (March 18, 2015). AFA 2011 Denver Meetings Paper; Yale ICF Working Paper No. 08-26. Available at SSRN: or

Steven G. Malliaris

University of Georgia - Department of Banking and Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States

Hongjun Yan (Contact Author)

DePaul University ( email )

1 East Jackson Blvd.
Chicago, IL 60604
United States


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