Fees, Ownership, and Performance: Evidence from Global Private Markets

42 Pages Posted: 16 Oct 2023

See all articles by Wayne Lim

Wayne Lim

Harvard University; University of Oxford

Date Written: August 18, 2023

Abstract

Accessing a novel and large sample of funds, this paper provides the first empirical analysis of contractual arrangements and investor welfare outcomes in the setting of global private markets. Fees vary by fund objective and region. European funds charge lower fees than US funds. However, lower fees are not linked to tighter regulations. Fund performance is not associated with compensation terms, indicating limited agency costs. In contrast, better fund performance is linked to higher managerial ownership. The results are robust to performance measures and model specifications.

Keywords: Incentives, compensation, ownership, performance, corporate governance, regulation, private markets, private equity, asset management, financial intermediation, alternative assets

JEL Classification: G11, G17, G23, G24, G32, G34

Suggested Citation

Lim, Wayne, Fees, Ownership, and Performance: Evidence from Global Private Markets (August 18, 2023). Available at SSRN: https://ssrn.com/abstract=4583270 or http://dx.doi.org/10.2139/ssrn.4583270

Wayne Lim (Contact Author)

Harvard University ( email )

University of Oxford ( email )

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