Skin or Skim? Inside Investment and Hedge Fund Performance

Gupta, Arpit; Sachdeva, Kunal

doi:10.3386/w26113

Cited by 15 publications

(13 citation statements)

References 54 publications

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“…For instance, many prior studies suggest that the size of insider shareholding affects the financial performance (Jensen and Meckling (1976): Fama & Jensen, 1983; Gupta & Sachdeva, 2017). However, the outcome indicates that insider shareholding has no influence on financial performance, itself consistent with findings of Agrawal and Knoeber (1996).…”

Section: Discussionmentioning

confidence: 99%

“…For instance, Fama and Jensen (1983) point that such an increase can result in managerial entrenchment. Recently, Gupta and Sachdeva (2017) tested a comprehensive data set of hedge funds on financial performance of firms with much or little insider shareholding,—using multiple linear regression models. It is found that firms with insider investment perform better than others.…”

Section: Literature Reviewmentioning

confidence: 99%

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Corporate governance and firms financial performance in the United Kingdom

2020

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The objective of this study is to examine empirically the impact of good corporate governance on financial performance of United Kingdom non‐financial listed firms. Agency theory and stewardship theory serve as the bases of a conceptual model. Five corporate governance mechanisms are examined on two financial performance indicators, return on assets and Tobin's Q, employing cross‐sectional regression methodology. The conclusion drawn from empirical test so performed on 252 firms listed on London Stock Exchange for the year 2014 indicates a positive or a negative relationship, but also sometimes no effect, of corporate governance mechanisms impact on financial performance. The implications are discussed. Thereby, so distinguishing effects due to causes, we present a proof that, when the right corporate governance mechanisms are chosen, the finances of a firm can be improved. The results of this research should have some implication on academia and policy makers thoughts.

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Section: Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Corporate governance and firms financial performance in the United Kingdom

2020

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“…In this spirit, we expect hedge funds to leave more money on the table when agency frictions are more severe (e.g., when their leverage is high, their reputation is low, and or when their assets are less liquid). A complementary point of view is proposed by Gupta and Sachdeva (2018). They argue that there is an important difference between inside and outside equity capital.…”

Section: Hypothesesmentioning

confidence: 99%

“…Consistent with this argument, we find that funds engage in fewer premature position closures if they have a longer track record, a more successful track record, or more liquid assets. We then test a recent idea by Gupta and Sachdeva (2018): hedge funds with high inside ownership (by their managers) may not want to dilute the returns on this inside capital and may thus be reluctant to raise additional equity capital from investors. We indeed find that hedge funds with high inside capital leave more money on the table, in line with these funds choosing to operate on a smaller scale.…”

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confidence: 99%

Fundamental Arbitrage under the Microscope: Evidence from Detailed Hedge Fund Transaction Data

Beschwitz

Lunghi²,

Schmidt

2021

The Review of Asset Pricing Studies

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We exploit detailed transaction and position data for a sample of long-short equity hedge funds to study the trading activity of fundamental investors. We find that hedge funds exhibit skill in opening positions, but that they close their positions too early, thereby forgoing about one-third of the trades’ potential profitability. We explain this behavior with the limits of arbitrage: hedge funds close positions early in order to reallocate their capital to more profitable investments and/or to accommodate tightened financial constraints. Consistent with this view, we document that hedge funds leave more money on the table after opening new positions, negative returns, or increases in funding constraints and volatility.

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“…This figure able to generate the investors' confidence and interest to invest further in this firm. On the other hand, other factors that investors look at when making the investment decisions are the insider shareholder (Akshita & Sharma, 2015;Gupta & Sachdeva, 2019), audit committees (Crisan & Fulop, 2014), strong board independence (Christensen, et al, 2010), the board size, CEO duality and the corporate structure of the firm (Mallin, 2016;Jakpar et al, 2019).…”

Section: Impact Of Corporate Governance and Human Governance On Firm mentioning

confidence: 99%

Human Governance and Firm Success From Western and Islamic Perspectives

Sapuan

Wahab

Sholihin

et al. 2020

JGI

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Human governance is an essential internal value that acts as a guide for a human to behave. Positive internal values can be the drivers to inspire people to work with integrity and accountability for the well-being of the businesses. Previous studies on corporate governance and firm performance show very little empirical evidence done in determining the role of human governance. The term human governance itself especially from the Western perspective is still unclearly defined. Thus, the objectives of this study are twofold. First, to investigate the characteristics of human governance from Western and Islamic perspectives. Second, to examine the factors that can improve the quality of human governance in order to mitigate the misconduct behaviour among the employees and the top management. The findings show that Western human governance emphasizes more on the good ethical values of human behaviour but Islamic human governance highlight on religiosity that build good spiritual that generates good behaviour among the Muslim people.

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Skin or Skim? Inside Investment and Hedge Fund Performance

Cited by 15 publications

References 54 publications

Corporate governance and firms financial performance in the United Kingdom

Corporate governance and firms financial performance in the United Kingdom

Fundamental Arbitrage under the Microscope: Evidence from Detailed Hedge Fund Transaction Data

Human Governance and Firm Success From Western and Islamic Perspectives

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