Bing Liang

Isenberg School of Management
University of Massachusetts Amherst
Amherst, MA 01002
Tel: (413) 545-3180
Fax: (413) 545-3858

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: University of Massachusetts-Amherst

NBER Working Papers and Publications

November 2009Trust and Delegation
with Stephen Brown, William Goetzmann, Christopher Schwarz: w15529
Due to imperfect transparency and costly auditing, trust is an essential component of financial intermediation. In this paper we study a sample of 444 due diligence (DD) reports from a major hedge fund DD firm. A routine feature of due diligence is an assessment of integrity. We find that misrepresentation about past legal and regulatory problems is frequent (21%), as is incorrect or unverifiable representations about other topics (28%). Misrepresentation, the failure to use a major auditing firm, and the use of internal pricing are significantly related to legal and regulatory problems, indices of operational risk. We find that DD reports are typically performed after positive performance and investor inflows. We control for potential bias due to this and other potential conditioning. An ...

Published: Brown, Stephen & Goetzmann, William & Liang, Bing & Schwarz, Christopher, 2012. "Trust and delegation," Journal of Financial Economics, Elsevier, vol. 103(2), pages 221-234. citation courtesy of

February 2003Fees on Fees in Funds of Funds
with Stephen J. Brown, William N. Goetzmann: w9464
Funds of funds are an increasingly popular avenue for hedge fund investment. Despite the increasing interest in hedge funds as an alternative asset class, the high degree of fund specific risk and the lack of transparency may give fiduciaries pause. In addition, many of the most attractive hedge funds are closed to new investment. Funds of funds resolve these issues by providing investors with diversification across manaager styles and professional oversight of fund operations that can provide the necessary degree of due diligence. In addition, many such funds hold shares in hedge funds otherwise closed to new investment allowing smaller investors access to the most sought-after managers. However, the diversification, oversight and access comes at the cost of a multiplication of fees paid ...

Published: Brown, S. J., W. N. Goetzmann, and B. Liang. “Fees on Fees in Funds of Funds.” Journal of Investment Management 2 (2004): 39-56.

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