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Reallocation of Mutual Fund Managers and Capital Raising Ability

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  • Yue Xu

    (Aarhus University, Department of Economics and Business Economics, and CREATES)

Abstract

This paper establishes the fund manager’s capital raising ability as an important managerial skill that fund firms exploit to generate higher firm revenues. Fund firms reallocate fund managers with high capital raising ability to other funds with large outflows. Investors demand the capital raising ability of managers and reward it by investing more capital despite lower future alphas. A team with a larger experience difference between reallocated managers and existing managers attracts more capital inflows, suggesting that there is a synergy effect on the fund manager’s capital raising ability. JEL classification: G11, G14, G23 Key words: Mutual Fund, Manager, Fund Firm, Reallocation, Revenue

Suggested Citation

  • Yue Xu, 2022. "Reallocation of Mutual Fund Managers and Capital Raising Ability," CREATES Research Papers 2022-11, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:create:2022-11
    as

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    File URL: https://repec.econ.au.dk/repec/creates/rp/22/rp22_11.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    mutual fund; manager; fund firm; reallocation; revenue;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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