Hedge Fund Family Ties

43 Pages Posted: 5 Sep 2020

See all articles by Harold D. Spilker III

Harold D. Spilker III

University Of Hawaii At Manoa, Shidler College of Business

Date Written: July 29, 2020

Abstract

Using a novel dataset, I show that hedge fund managers connected through shared employment histories hold and co-trade more of the same stocks than unconnected managers. Results are greater between fund pairs with stronger social connections and longer dated relationships, implying a socially reinforcing channel is responsible. A long-short portfolio of overlapped socially connected versus unconnected stocks generates alpha of 13.3% per year. Findings herein support models of manager coordination and identifies employment linked hedge funds as a common source of correlated risk and return.

Keywords: Hedge Funds, Social Networks, Investment Decisions, Manager Origin

JEL Classification: G11, G12, G23

Suggested Citation

Spilker III, Harold D., Hedge Fund Family Ties (July 29, 2020). Available at SSRN: https://ssrn.com/abstract=3663574

Harold D. Spilker III (Contact Author)

University Of Hawaii At Manoa, Shidler College of Business ( email )

2404 Maile Way
Honolulu, HI 96822
United States
8089568738 (Phone)

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