Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45541
Authors: 
Agarwal, Vikas
Ray, Sugata
Year of Publication: 
2011
Series/Report no.: 
CFR working paper 11-09
Abstract: 
We examine the determinants and consequences of changes in hedge fund fee structures. We show that fee changes are asymmetric with much greater incidence of fee increases compared to fee decreases. We find that managers of younger and smaller funds are more likely to increase fees after good performance. Investors view the fee increases following good performance as a signal of managerial ability only to be disappointed by their worse future performance. Taken together, these findings are consistent with opportunistic behavior of emerging fund managers in expropriating surplus from their investors.
Document Type: 
Working Paper

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