37 Pages Posted: 20 Nov 2014 Last revised: 10 May 2016
Date Written: May 9, 2016
This paper analyzes the impact of the Dodd-Frank Act on hedge fund performance, risk, and fund flows. The data indicate that, relative to non-US hedge funds, US hedge funds that are regulated under Dodd-Frank have experienced greater decline in fund alphas, return standard deviation, and information ratio in the post-Dodd-Frank implementation period. We find evidence that capital flows out of US hedge funds after the implementation of Dodd-Frank. We show some differences in these findings depending on fund size and strategy. The findings are robust to difference-in-differences analyses comparing US to non-US funds, among other things.
Keywords: Hedge Funds, Dodd-Frank, Law and Finance
JEL Classification: G23, G24, G28, K22
Suggested Citation: Suggested Citation