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The pay-performance sensitivity (PPS) of managers of closed-end funds is explicitly specified in their contracts as the marginal rate of the funds' net asset value. Using a sample of US closed-end funds from 2006 to 2009, this paper investigates the relationship between the PPS and risk-taking behaviors of fund managers. After controlling for endogeneity, we find that fund return volatility and fund PPS positively determine each other. Furthermore, the positive relationship is more pronounced for closed-end funds engaging in alternative investments or in emerging markets.

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This paper investigates the short-run price performance of venture capital trust (VCT) initial public offerings (IPOs). We find a very small positive first-day market-adjusted average abnormal return of 0.056% for VCT IPOs. This positive return is non-existent at the end of the seventh and twenty-first trading days. The abnormal returns for VCT IPOs are much smaller than those for non-financial IPOs over the sample period. Furthermore, we find no trading activities in the short-run aftermarket of VCTs.

With special institutional characteristics and regulatory requirements, what factors can motivate UK closed-end funds to engage in open-market repurchases? Investigating repurchase transactions on financial-year basis, I find that funds repurchase shares to reduce discounts and to increase the net asset value per share, as directors claim, but not to increase fund liquidity. I also find that funds repurchase shares to increase leverage ratios. Unlike conventional firms, neither distributing excess cash nor substituting dividend payouts promote fund repurchases. Fund size has a negative effect on repurchase decision.