Fund Families as Delegated Monitors of Money Managers

Posted: 29 Feb 2008

See all articles by Simon Gervais

Simon Gervais

Duke University - Fuqua School of Business; Duke Innovation & Entrepreneurship Initiative

y W. Lynch

affiliation not provided to SSRN

d K. Musto

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: 2005

Abstract

Because a money manager learns more about her skill from her management experience than outsiders can learn from her realized returns, she expects inefficiency in future contracts that condition exclusively on realized returns. A fund family that learns what the manager learns can reduce this inefficiency cost if the family is large enough. The family`s incentive is to retain any given manager regardless of her skill but, when the family has enough managers, it adds value by boosting the credibility of its retentions through the firing of others. As the number of managers grows, the efficiency loss goes to zero.

Keywords: brain metastases, HRQoL, stereotactic radiosurgery

Suggested Citation

Gervais, Simon and Lynch, y W. and Musto, d K., Fund Families as Delegated Monitors of Money Managers ( 2005). The Review of Financial Studies, Vol. 18, Issue 4, pp. 1139-1169, 2005, Available at SSRN: https://ssrn.com/abstract=900701

Simon Gervais (Contact Author)

Duke University - Fuqua School of Business ( email )

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Y W. Lynch

affiliation not provided to SSRN

No Address Available

D K. Musto

affiliation not provided to SSRN

No Address Available

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