The Company You Keep: Investment Manager Clientele and Mutual Fund Performance

72 Pages Posted: 21 Nov 2017 Last revised: 17 Apr 2019

Date Written: April 15, 2019

Abstract

This paper examines how the composition of an investment adviser’s client base (identified via Form ADV filings) relates to the performance of its mutual funds. Investment advisers catering to institutional clients realize statistically and economically superior risk-adjusted mutual fund performance relative to retail-oriented advisers. The findings are consistent with the empirical predictions of the Gârleanu and Pedersen (2018) model for asset management markets. The results suggest that institutional clients can identify differences in investment manager skill, particularly in market segments where retail mutual fund investors face higher search costs.

Keywords: Investment advisers, mutual funds, institutional investors, Form ADV

JEL Classification: G11, G23

Suggested Citation

Beggs, William, The Company You Keep: Investment Manager Clientele and Mutual Fund Performance (April 15, 2019). Available at SSRN: https://ssrn.com/abstract=3070608 or http://dx.doi.org/10.2139/ssrn.3070608

William Beggs (Contact Author)

University of San Diego ( email )

5998 Alcala Park
San Diego, CA 92110

HOME PAGE: http://wcbeggs.com

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