Birds of a Feather – Do Hedge Fund Managers Flock Together?

42 Pages Posted: 10 Feb 2016 Last revised: 6 Apr 2021

See all articles by Marc Gerritzen

Marc Gerritzen

Alterneo Capital

Jens Carsten Jackwerth

University of Konstanz - Department of Economics

Alberto Plazzi

Universita' della Svizzera italiana; Swiss Finance Institute

Date Written: July 17, 2020

Abstract

Mandatory filings for UK hedge funds suggest that managers having worked at the same prior employer invest more similarly in terms of distances of returns. If they overlapped in employment, increasing the chance of social ties, investments become even more similar. The joint effect accounts for up to two-thirds of the difference in investing behavior. Results are robust to fund and manager level controls, as well as to identification concerns. With controls, the same-employer effect is concentrated in the systematic component (beta) while the overlap effect is concentrated in the idiosyncratic components (alpha and residuals).

Keywords: hedge funds, social ties, networks, abnormal performance

JEL Classification: G11, G20, G23

Suggested Citation

Gerritzen, Marc and Jackwerth, Jens Carsten and Plazzi, Alberto, Birds of a Feather – Do Hedge Fund Managers Flock Together? (July 17, 2020). Swiss Finance Institute Research Paper No. 16-10 , Available at SSRN: https://ssrn.com/abstract=2729993 or http://dx.doi.org/10.2139/ssrn.2729993

Marc Gerritzen

Alterneo Capital ( email )

Hamburg
Germany

Jens Carsten Jackwerth

University of Konstanz - Department of Economics ( email )

Universitaetsstr. 10
Konstanz, 78457
Germany
+497531882196 (Phone)
+497531883120 (Fax)

HOME PAGE: http://cms.uni-konstanz.de/wiwi/jackwerth/

Alberto Plazzi (Contact Author)

Universita' della Svizzera italiana ( email )

Via Buffi 13
CH-6900 Lugano
Switzerland

HOME PAGE: http://usi.to/mpy

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
341
Abstract Views
2,484
rank
115,323
PlumX Metrics