Hedge fund politics and portfolios

DeVault, Luke; Sias, Richard W.

doi:10.1016/j.jbankfin.2016.10.011

Cited by 12 publications

(2 citation statements)

References 78 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Their interactions can generate a variety of risk taking, thereby, to some extent, helping to explain the observed cross-sectional variation in hedge fund managers’ portfolio decisions documented by Sias et al. ( 2016 ), and providing theoretical support for the evidence of DeVault and Sias ( 2017 ) that hedge fund managers’ psychological characteristics influence their portfolio choice.…”

Section: Introductionmentioning

confidence: 89%

Robust risk choice under high-water mark contract

Yan

Yang

2023

Rev Quant Finan Acc

View full text Add to dashboard Cite

By assuming that a risk-neutral hedge fund manager has ambiguous beliefs about the return process of risky asset, we study his robust risk choice under the high-water mark. The results show that without management fees, ambiguity aversion induces the manager to take more risk as the fund is close to the termination but take less risk as the fund approaches the high-water mark. With management fees, ambiguity aversion increases the induced risk aversion and moderates the manager’s incentive to take risk, predicting that it is the manager with higher rates of management fees that reduces the risky asset holdings more when he becomes less confident and/or more pessimistic about the future returns. The model implies that managers’ ambiguity aversion is a possible factor explaining hedge fund activities in stock markets during the financial crisis of 2007–2009 and in US Treasury markets during COVID-19 crisis. Finally, taxation is taken into account.

show abstract

Section: Introductionmentioning

confidence: 89%

Robust risk choice under high-water mark contract

Yan

Yang

2023

Rev Quant Finan Acc

View full text Add to dashboard Cite

show abstract

“…For example, companies managed by Republicans tend to invest less in R&D, have less risky assets and borrow less (Hutton et al., 2014). Similarly, companies managed by Republicans are less likely to avoid corporate taxes (Christensen et al., 2015), make more conservative accounting judgments (Dong et al., 2018; Notbohm et al., 2019), and invest in larger and less risky companies (DeVault & Sias, 2017), relative to their counterparts managed by Democrats.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Audit engagement partner ideology, ideological homophily, and audit quality

Goenner,

Guo,

Notbohm

2023

Business Fin & Account

View full text Add to dashboard Cite

Previous studies have shown that audit quality is influenced by the audit engagement partner's characteristics. Extending this literature, we examine the association between audit engagement partner ideology (i.e. conservatism) and audit quality. We find that clients whose audit engagement partners are ideologically more conservative receive higher quality audits, as indicated by lower discretionary accruals than clients with less conservative auditors. Additionally, we find evidence that the relation between the auditor's ideology and that of the client's executives influences audit quality, as does the ideological homophily between the auditor and the client's audit committee. Homophilous pairings between the audit engagement partner and the client's executives, where the two parties share a similar ideology, are associated with both higher discretionary accruals and higher probabilities of restatement. Discretionary accruals are also shown to be higher when engagement partners share an ideology with their client's audit committee. We interpret these results as evidence of less effective monitoring by the engagement partner when they share political views with their clients.

show abstract

Robust leverage decision under locked wealth and high-water mark contract

Luo

et al. 2022

Finance Research Letters

View full text Add to dashboard Cite

Hedge fund politics and portfolios

Cited by 12 publications

References 78 publications

Robust risk choice under high-water mark contract

Robust risk choice under high-water mark contract

Audit engagement partner ideology, ideological homophily, and audit quality

Robust leverage decision under locked wealth and high-water mark contract

Contact Info

Product

Resources

About