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[2023년 2차] Hedge Fund Awards: Do Investors and Managers Care, and Should They?

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We investigate the impact of hedge fund awards on hedge fund flows, performance, and risk-taking behavior. We show that award winners experience a significant increase in fund flows but find no evidence that they deliver superior alpha subsequently. Meanwhile, fund managers with a feasible chance of winning the award increase fund risk, suggesting tournament behavior among the top-performing managers. We also find an increase in investor attention following award announcements, as captured by search volume on Google and the SEC’s EDGAR system. These results expand our understanding of the behavior of presumably sophisticated investors in the hedge fund industry and managerial incentives that arise in response.
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Hedge Fund Awards Do Investors and Managers Care, and Should They.pdf
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