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Managerial multitasking in the mutual fund industry

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  • Agarwal, Vikas
  • Ma, Linlin
  • Mullally, Kevin

Abstract

We examine the determinants and consequences of mutual fund managers simultaneously managing multiple funds. Well-performing managers multitask by taking over poorly performing funds or launching new funds. Subsequent to multitasking, funds run by managers prior to multitasking (i.e., incumbent funds) experience performance deterioration while the performance of the acquired funds improves. Multitasking increases the assets of fund companies but results in a wealth transfer from shareholders of the incumbent funds to those of the funds the managers take over. Multitasking arrangements are terminated when investors recognize the associated agency problem and withdraw their capital from the incumbent funds.

Suggested Citation

  • Agarwal, Vikas & Ma, Linlin & Mullally, Kevin, 2015. "Managerial multitasking in the mutual fund industry," CFR Working Papers 13-10 [rev.], University of Cologne, Centre for Financial Research (CFR).
    • Handle: RePEc:zbw:cfrwps:1310r
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    References listed on IDEAS

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    1. Sprenker, Patrick Matthias, 2017. "RAIF – Reserved Alternative Investment Fund – The impact on the Luxembourg Fund Market and the Alternative Investment Fund landscape," EIKV-Schriftenreihe zum Wissens- und Wertemanagement, European Institute for Knowledge & Value Management (EIKV), Luxembourg, volume 19, number 19.
    2. Vikas Agarwal & Yan Lu & Sugata Ray, 2016. "Under One Roof: A Study of Simultaneously Managed Hedge Funds and Funds of Hedge Funds," Management Science, INFORMS, vol. 62(3), pages 722-740, March.

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    More about this item

    Keywords

    Multitasking; Fund Performance; Fund Flows; Agency Problems;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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