Managerial Characteristics and Hedge Fund Performance

Journal of Applied Finance, Forthcoming

30 Pages Posted: 28 Dec 2005

See all articles by Clark L. Maxam

Clark L. Maxam

Braddock Financial Corporation - Tabor Center; Trailcrest Capital Advisors

Milena Petrova

Syracuse University - Whitman School of Management; Bocconi University

Ehsan Nikbakht

Hofstra University

Andrew C. Spieler

Hofstra University - Department of Finance


The tremendous growth in assets managed in hedge funds is well recognized. However, monitoring, valuation and performance assessment is confounded by the paucity and inconsistency of available data. Hedge funds do not regularly report their performance and rarely divulge holdings. Utilizing a unique data set we are able to shed some light on the relationship between performance and various hedge fund manager characteristics. We examine the influence of characteristics such as education and prior work experience on performance by hedge fund style for 147 hedge funds over the 1994-2004 period. Our results indicate that managers with degrees from top US schools outperform their peers unless those degrees are in economics or technical fields. Managers with undergraduate degrees in economics and especially those from top ranked schools significantly underperform their peers and the same result occurs, but less significantly, with technical degrees. Prior work experience does not change these results and they are also robust to the type of strategy employed by the hedge fund and alternative measures of performance including the Stutzer Index and Omega Measure. Thus, our results have interesting implications for the selection of hedge fund managers and particularly for the formation of diversified asset class targeted hedge fund products such as funds of funds.

Keywords: hedge funds, characteristics, performance

Suggested Citation

Maxam, Clark L. and Maxam, Clark L. and Petrova, Milena and Nikbakht, Ehsan and Spieler, Andrew, Managerial Characteristics and Hedge Fund Performance. Journal of Applied Finance, Forthcoming, Available at SSRN:

Clark L. Maxam

Braddock Financial Corporation - Tabor Center ( email )

1200 17th Street, Suite 880
Denver, CO 80202
United States

Trailcrest Capital Advisors ( email )

6781 Nautique Circle
Larkspur, CO 80118
United States

Milena Petrova

Syracuse University - Whitman School of Management ( email )

721 University Avenue
Syracuse, NY 13244-2130
United States

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136

Ehsan Nikbakht

Hofstra University ( email )

Hempstead, NY 11549
United States

Andrew Spieler (Contact Author)

Hofstra University - Department of Finance ( email )

Hempstead, NY 11550
United States

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