Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147145
Authors: 
Wu, Youchang
Wermers, Russ
Zechner, Josef
Year of Publication: 
2016
Series/Report no.: 
CFS Working Paper Series 548
Abstract: 
We examine the dynamics of assets under management (AUM) and management fees at the portfolio manager level in the closed-end fund industry. We find that managers capitalize on good past performance and favorable investor perception about future performance, as reflected in fund premiums, through AUM expansions and fee increases. However, the penalties for poor performance or unfavorable investor perception are either insignificant, or substantially mitigated by manager tenure. Long tenure is generally associated with poor performance and high discounts. Our findings suggest substantial managerial power in capturing CEF rents. We also document significant diseconomies of scale at the manager level.
Subjects: 
Closed-end fund
Closed-end fund discount
Managerial rent
JEL: 
G23
G34
Document Type: 
Working Paper

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