Fund Advisor Compensation in Closed-End Funds
Abstract
This paper examines the relation between the premium on closed-end funds and organizational features of the funds and advisors, including the compensation scheme of the investment advisor. We find that the fund premium is larger when: (a) the advisor's compensation is more sensitive to fund performance; (b) the assets managed by the advisor are concentrated in the fund in question; (c) the advisor manages "other" funds with low compensation sensitivity to performance and with low concentration of assets managed by the advisor; and (d) the advisor's compensation contract evaluates performance relative to a benchmark. Copyright The American Finance Association 2000.Download Info
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Bibliographic Info
Article provided by American Finance Association in its journal The Journal of Finance.
Volume (Year): 55 (2000)
Issue (Month): 3 (06)
Pages: 1385-1414
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Wu, Youchang & Wermers, Russ & Zechner, Josef, 2012. "Governance and shareholder value in delegated portfolio management: The case of closed-end funds," CFR Working Papers 12-11, University of Cologne, Centre for Financial Research (CFR).
- William M. Gentry & Charles M. Jones & Christopher J. Mayer, 2004. "Do Stock Prices Really Reflect Fundamental Values? The Case of REITs," NBER Working Papers 10850, National Bureau of Economic Research, Inc.
- Gerald T. Garvey & Todd T. Milbourn, 2003. "Asymmetric Benchmarking in Compensation: Executives are Paid for (Good) Luck But Not Punished for Bad," Claremont Colleges Working Papers 2003-01, Claremont Colleges.
- Agarwal, Vikas & Gómez, Juan-Pedro & Priestley, Richard, 2011. "Management compensation and market timing under portfolio constraints," CFR Working Papers 11-16, University of Cologne, Centre for Financial Research (CFR).
- Joanne Yoong & Angela A. Hung, 2009. "Self-Dealing and Compensation for Financial Advisors," Working Papers 713, RAND Corporation Publications Department.
- Agarwal, Vikas & Gómez, Juan-Pedro & Priestley, Richard, 2012. "Management compensation and market timing under portfolio constraints," CFR Working Papers 11-16 [rev.], University of Cologne, Centre for Financial Research (CFR).
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