Conference on New Developments in Long-Term Asset Management
Monika Piazzesi and Luis Viceira, Organizers
May 19-20, 2016
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Family Descent as a Signal of Managerial Quality:
Many investors delegate decision-making about their portfolios to professional managers. Choosing these managers is consequently a central task for those with investable assets. Oleg Chuprinin and Denis Sosyura provide evidence that a manager's family wealth and access to abundant resources during formative years, which can be gleaned from public records, are negatively correlated with the manager's performance.
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Incentive Fees and Competition in Pension Funds
Asset Manager Funds
An Equilibrium Model of Institutional Demand
The Effect of Passive Investors on Activism
Volatility Managed Portfolios
Risk and Return in Segmented Markets
Securities Lending as Wholesale Funding
Liquidity Transformation in Asset Management
The authors of this paper study the relation between mutual fund managers' family background and their investment performance. To identify managers' family characteristics, they collect data on the households in which managers grew up by examining individual census records at the National Archives. These records provide detailed information on the income, home value, education, and occupation of a manager's parents during his childhood, as well as other demographic characteristics.
Most fund managers come from families wealthier and more-educated than those in the general population. For example, the median value of father's income for fund managers in the sample was at the 89th percentile of the income distribution for U.S. men. Managers' fathers were also more educated, and owned homes valued at nearly twice the median of their census tract. Consistent with the notion that family economic status is an important factor for an individual's subsequent career progression, the researchers observe that managers from wealthier backgrounds are more likely to attend comparatively selective, more expensive private colleges. The median undergraduate tuition was five times higher at colleges attended by managers from the top quintile of family wealth than at those attended by managers from the bottom quintile, and the admission rate was 38 percentage points lower.