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The University of Southampton
Centre for Risk Research

Seminar Explores Hedge Fund Risks

Published: 3 June 2015

In a recent seminar hosted by the Centre for Risk Research, Dr Leilei Tang presented a paper that explored whether hedge funds are safer investments when the hedge fund manager has invested their personal capital in the fund.

Leilei's study investigated the relationship between management stakes and the mortality risk of hedge funds when treating the stakes as an endogenous variable. Endogeneity bias was incorporated by jointly estimating the managerial investment decision process and the survivorship process. The study revealed that a favourable-selection bias exists concerning whether managers are present or absent as investors. The empirical findings showed that the effect of managerial stakes is often overstated in previous research when endogeneity bias is accounted for.

 

Leilei engages the audience

Leilei is a Senior Lecturer in Finance at the University of Strathclyde. His research involves performing empirical, multi-disciplinary analysis covering a wide variety of topics on financial econometrics, credit scoring, hedge fund governance and corporate finance. He has recent publications in leading international refereed journals such as European Journal of Operational Research, Journal of Empirical Finance, Journal of International Financial Markets, Institutions & Money, and International Review of Financial Analysis.

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