The Strategic Listing Decisions of Hedge Funds

41 Pages Posted: 11 Aug 2013

See all articles by Philippe Jorion

Philippe Jorion

University of California, Irvine - Paul Merage School of Business

Christopher Schwarz

University of California at Irvine

Date Written: November 11, 2012

Abstract

The voluntary nature of hedge fund database reporting creates strategic listing opportunities for hedge funds. However, little is known about how managers list funds across multiple databases or whether investors are fooled by funds’ listing decisions. In this paper, we find that hedge funds strategically list their small, best performing funds in multiple outlets immediately while preserving the option to list their other funds in additional databases later. We generally find that investors react rationally to these fund listings based on the predictability of performance. Finally, our results lead to specific guidelines on handling backfilled returns to minimize biases.

Keywords: hedge funds, advertising, public database, performance evaluation, backfill bias

JEL Classification: G11, G23, G32

Suggested Citation

Jorion, Philippe and Schwarz, Christopher, The Strategic Listing Decisions of Hedge Funds (November 11, 2012). Available at SSRN: https://ssrn.com/abstract=2308397 or http://dx.doi.org/10.2139/ssrn.2308397

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)

Christopher Schwarz (Contact Author)

University of California at Irvine ( email )

Irvine, CA 92697-3125
United States

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