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The University of Southampton
Centre for Risk Research

Does a manager's personal stake in a hedge fund affect its risk of survival? Event

Time:
13:00 - 14:00
Date:
12 May 2015
Venue:
Room 4003 Building 4 (School of Law) Highfield Campus University of Southampton

For more information regarding this event, please telephone Dr Ian Dawson on +44 (0)2380 598094 or email i.g.dawson@soton.ac.uk .

Event details

Dr Leilei Tang will present a paper that explorers whether hedge funds whose managers have their personal capital invested in their funds are safer than those which do not. This study investigates the relationship between management stakes and the mortality risk of hedge funds, treating these stakes as an endogenous variable. Endogeneity bias is incorporated by jointly estimating the managerial investment decision process and the survivorship process. It is found that a favourable-selection bias exists concerning whether managers are present or absent as investors. The empirical findings show that the effect of managerial stakes is overstated in previous research when endogeneity bias is accounted for. 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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