Exploring Uncharted Territories of the Hedge Fund Industry: Empirical Characteristics of Mega Hedge Fund Firms

61 Pages Posted: 15 Oct 2012 Last revised: 30 Mar 2015

Daniel Edelman

Independent

William Fung

Maple Financial Group

David A. Hsieh

Duke University - Fuqua School of Business; Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: March 23, 2013

Abstract

This paper investigates mega hedge fund management companies that manage over 50% of the industry’s assets, incorporating previously unavailable data from those that do not report to commercial databases. We document similarities among mega firms that report performance to commercial databases compared to those that do not. We show that the largest divergences between the performance reporting and non-reporting can be traced to differential exposure to credit markets. Thus the performance of hard-to-observe mega firms can be inferred from observable data. This conclusion is robust to delisting bias and the presence of serially correlated returns.

Keywords: hedge funds, asset management

JEL Classification: G11, G12, G23

Suggested Citation

Edelman, Daniel and Fung, William and Hsieh, David A., Exploring Uncharted Territories of the Hedge Fund Industry: Empirical Characteristics of Mega Hedge Fund Firms (March 23, 2013). Available at SSRN: https://ssrn.com/abstract=2161123 or http://dx.doi.org/10.2139/ssrn.2161123

Daniel Edelman

Independent ( email )

No Address Available

William (Bill) Fung

Maple Financial Group ( email )

79 Wellington Street West
Suite 3500
Toronto, Ontario M5K 1K7
Canada

David Arthur Hsieh (Contact Author)

Duke University - Fuqua School of Business ( email )

Department of Finance
Box 90120
Durham, NC 27708-0120
United States
919-660-7779 (Phone)
919-660-7961 (Fax)

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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