Managerial rents vs. shareholder value in delegated portfolio management: the case of closed-end funds
- 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.
Author: | Youchang Wu, Russ Wermers, Josef ZechnerORCiDGND |
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URN: | urn:nbn:de:hebis:30:3-418673 |
URL: | https://ssrn.com/abstract=2858912 |
Parent Title (English): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 548 |
Series (Serial Number): | CFS working paper series (548) |
Publisher: | Center for Financial Studies |
Place of publication: | Frankfurt, M. |
Document Type: | Working Paper |
Language: | English |
Year of Completion: | 2016 |
Year of first Publication: | 2016 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2016/11/01 |
Tag: | Closed-end fund; Closed-end fund discount; Managerial rent |
Issue: | July 3, 2016 |
Page Number: | 63 |
HeBIS-PPN: | 396717551 |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) | |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Sammlungen: | Universitätspublikationen |
Licence (German): | Deutsches Urheberrecht |