Ivy League Hedge Fund Managers Get Away With More

具有着名学位的对冲基金管理人员不一定比同龄人更聪明。但根据秋季发表的新研究，他们确实利用他们的网络和他们的Alma潜行者更好地构建了他们的资金并提供了更高的回报替代投资杂志.

该研究，称为“经理特征和对冲基金回报，流动性和生存”，发现对冲基金管理人员的教育队长直接影响了奥术，但至关重要，特征就像其投资组合的流动性。

“当我阅读分析对冲基金教育对表现的影响的论文时，我认为缺少某些东西，”纽约城市大学布鲁克林学院的作者以及布鲁克林学院副教授II. “Now I’ve found that funds that have managers who are highly educated invest in more illiquid assets, as well as impose more severe restrictions. That is a very strong relationship.”

According to the study, these funds not only delivered higher returns on average, but also lower risk, higher Sharpe ratios, and higher alphas, or returns above a benchmark.

投资者often view limitations on redemptions negatively, but these restrictions give managers the ability to put more money to work in investments that are less liquid. Less liquidity means assets are more difficult to buy and sell, but it also means a higher payoff potential. Hedge fund managers with more investor limits in place can also wait out downturns, reducing the risk that they have to sell positions at lower prices.

In the paper, Park argued that alumni networks contribute to the bump that managers get from top schools. “The major driving force is trust inspired by the reputation and network of elite institutions,” she wrote in the study. She defined elite education as a school in the top 10 of U.S. News’ ranking of universities and business schools. The study looked at hedge fund data between 1994 and 2015.

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Park found that a manager’s education signaled whether or not their hedge fund would be around in the long term. But an even better indication of survival, according to the study, was whether or not a manager that holds the Chartered Financial Analyst (CFA) designation. Between 1994 and 2015, the so-called hazard rate, or rate at which they fail, of funds managed by CFAs was 13.6 percent lower than other funds after controlling for factors such as risk, return, and investment style, according to the paper.

Other researchers have studied the connection between lockup provisions and better performance as well as the effect of having attended a prestigious school, but this is the first time that research has addressed why some funds can impose stronger share restrictions than others.

Park found that on average managers with a degree from a top 10 school ran funds with longer lock-up and redemption notice periods. These asset managers also processed requests from investors to redeem their shares less frequently than other funds. In addition, managers with elite degrees charged higher performance fees, but lower annual management fees than other funds.

“These findings are especially important for hedge fund investors who have long investment horizons, such as pension funds,” Park wrote in the paper. “This article shows that the educational backgrounds and certification of hedge fund managers are related not only to the liquidity premium that long-horizon investors can earn, but also to lower search costs due to high survival rates.”

The research has already attracted some criticism, according to Park. She toldIIthat she had just received an email from a fund manager complaining that the study perpetuated biases about educational backgrounds.

“His point is that papers like mine can be used by HR people or funds to discriminate against managers who don’t have an Ivy League education,” she said. “I never intended to have my paper used for that purpose. I’m not the first to find the relationship. But I wanted to dig deeper and investigate the reasons behind it. I’ve shown that the difference is not about knowledge. It’s about the network effect. At least, my research is ‘helping to demystify the difference.’”