Is There a Cost to Transparency?

Posted: 26 Mar 2012

See all articles by Rajesh K. Aggarwal

Rajesh K. Aggarwal

Northeastern University

Philippe Jorion

University of California, Irvine - Paul Merage School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: March, 26 2012

Abstract

Conducting the first direct tests for the cost of private transparency, the authors examined whether a willingness to offer transparency to investors is beneficial or costly in terms of hedge fund returns. Transparency is implicit when a fund accepts managed accounts because such accounts are directly controlled by investors. Overall, the authors found no evidence that transparency harms fund returns. They also found no support for concerns that managers offering transparency suffer from selection bias.

Keywords: Alternative Investments, Best Practices, Regulatory Issues, Strategy Categories, Portfolio Management, Alternative Investment Portfolio Management Strategies, Hedge Funds

Suggested Citation

Aggarwal, Rajesh K. and Jorion, Philippe, Is There a Cost to Transparency? (March, 26 2012). Financial Analysts Journal, Vol. 68, No. 2, 2012. Available at SSRN: https://ssrn.com/abstract=2029288

Rajesh K. Aggarwal (Contact Author)

Northeastern University ( email )

413 Hayden Hall
360 Huntington Avenue
Boston, MA 02115
United States

Philippe Jorion

University of California, Irvine - Paul Merage School of Business ( email )

Campus Drive
Irvine, CA 92697-3125
United States
949-824-5245 (Phone)
949-824-8469 (Fax)

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