Why Do Hedge Funds Avoid Disclosure? Evidence from Confidential 13F Filings
47 Pages Posted: 15 Mar 2012 Last revised: 4 Sep 2013
Date Written: June 1, 2012
We study a sample of Form 13F filings where fund advisors seek confidential treatment for some, or all, of their 13(f)-reportable positions. Consistent with the hypothesis that managers seek confidentiality to protect proprietary information we find that confidential positions earn positive and significant abnormal returns over the post-filing confidential period. We also find that managers are more likely to seek confidential treatment of illiquid positions that are more susceptible to front-running. Overall, our analysis highlights important benefits of reduced disclosure that are relevant to the current policy debate on hedge fund transparency.
Keywords: Disclosure, Hedge Fund Performance, Financial Regulation
JEL Classification: G28
Suggested Citation: Suggested Citation