Choosing Investment Managers

67 Pages Posted: 16 Sep 2020 Last revised: 22 Feb 2022

See all articles by Amit Goyal

Amit Goyal

University of Lausanne; Swiss Finance Institute

Sunil Wahal

Arizona State University (ASU) - Finance Department

M. Deniz Yavuz

Purdue University - Krannert School of Management

Date Written: February 14, 2022

Abstract

We study how plan sponsors choose investment management firms from their opportunity set when delegating $1.6 trillion in assets between 2002 and 2017. Choice is related to (i) pre-hiring returns, and (ii) pre-existing connections between personnel at the plan (or investment consultant), and the investment management firm. Ex post, connections do not result in higher post-hiring returns. Relationships are thus conducive to asset gathering by investment managers but do not generate commensurate pecuniary benefits for plan sponsors.

JEL Classification: G10, G11, G20, G23, H55, H75, J32, D91

Suggested Citation

Goyal, Amit and Wahal, Sunil and Yavuz, M. Deniz, Choosing Investment Managers (February 14, 2022). Swiss Finance Institute Research Paper No. 20-63, Available at SSRN: https://ssrn.com/abstract=3651476 or http://dx.doi.org/10.2139/ssrn.3651476

Amit Goyal (Contact Author)

University of Lausanne ( email )

Batiment Extranef 226
Lausanne, Vaud CH-1015
Switzerland
+41 21 692 3676 (Phone)
+41 21 692 3435 (Fax)

HOME PAGE: http://www.hec.unil.ch/agoyal/

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Sunil Wahal

Arizona State University (ASU) - Finance Department ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States

M. Deniz Yavuz

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

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