Starjournal Quotation Wermers, Russ, Wu, Youchang, Zechner, Josef. 2016. Managerial Rents vs. Shareholder Value in Delegated Portfolio Management: The Case of Closed-End Funds. Review of Financial Studies. 29 3428-3470.


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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 perceptions about future performance, as reflected in fund premiums, through AUM expansions and fee increases. However, the penalties for poor performance or unfavorable investor perceptions 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.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Review of Financial Studies
Citation Index SSCI
WU Journalrating 2009 A+
Starjournal Y
Language English
Title Managerial Rents vs. Shareholder Value in Delegated Portfolio Management: The Case of Closed-End Funds
Volume 29
Year 2016
Page from 3428
Page to 3470
Reviewed? Y
URL http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2179125
DOI http://dx.doi.org/10.1093/rfs/hhw065
Open Access N

Associations

People
Zechner, Josef (Details)
External
Wermers, Russ (University of Maryland at College Park, United States/USA)
Wu, Youchang (Wisconsin School of Business, United States/USA)
Organization
Institute for Finance, Banking and Insurance IN (Details)
Research Institute for Capital Markets FI (Details)
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