Responsible hedge funds

Hedge funds that endorse the United Nations Principles for Responsible Investment (PRI) underperform other hedge funds after adjusting for risk but attract greater investor flows, accumulate more assets, and harvest greater fee revenues. Consistent with an agency explanation, the underperformance is...

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Main Authors: LIANG, Hao, SUN, Lin, TEO, Song Wee Melvyn
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2022
Subjects:
ESG
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/7030
https://ink.library.smu.edu.sg/context/lkcsb_research/article/8029/viewcontent/ResponsibleHedgeFunds_pvoa.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.lkcsb_research-80292023-10-10T03:08:14Z Responsible hedge funds LIANG, Hao SUN, Lin TEO, Song Wee Melvyn Hedge funds that endorse the United Nations Principles for Responsible Investment (PRI) underperform other hedge funds after adjusting for risk but attract greater investor flows, accumulate more assets, and harvest greater fee revenues. Consistent with an agency explanation, the underperformance is driven by PRI signatories with low environmental, social, and governance (ESG) exposures and is greater for hedge funds with poor incentive alignment. To address endogeneity, we exploit regulatory reforms that enhance stewardship and show that the ESG exposure and relative performance of signatory funds improve post reforms. Our findings suggest that some hedge funds endorse responsible investment to pander to investor preferences. 2022-11-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/7030 info:doi/10.1093/rof/rfac028 https://ink.library.smu.edu.sg/context/lkcsb_research/article/8029/viewcontent/ResponsibleHedgeFunds_pvoa.pdf http://creativecommons.org/licenses/by/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Responsible investing ESG Agency problems Incentive alignment Greenwashing Hedge funds Sustainable finance Stewardship Principles for Responsible Investment Finance and Financial Management Portfolio and Security Analysis
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Responsible investing
ESG
Agency problems
Incentive alignment
Greenwashing
Hedge funds
Sustainable finance
Stewardship
Principles for Responsible Investment
Finance and Financial Management
Portfolio and Security Analysis
spellingShingle Responsible investing
ESG
Agency problems
Incentive alignment
Greenwashing
Hedge funds
Sustainable finance
Stewardship
Principles for Responsible Investment
Finance and Financial Management
Portfolio and Security Analysis
LIANG, Hao
SUN, Lin
TEO, Song Wee Melvyn
Responsible hedge funds
description Hedge funds that endorse the United Nations Principles for Responsible Investment (PRI) underperform other hedge funds after adjusting for risk but attract greater investor flows, accumulate more assets, and harvest greater fee revenues. Consistent with an agency explanation, the underperformance is driven by PRI signatories with low environmental, social, and governance (ESG) exposures and is greater for hedge funds with poor incentive alignment. To address endogeneity, we exploit regulatory reforms that enhance stewardship and show that the ESG exposure and relative performance of signatory funds improve post reforms. Our findings suggest that some hedge funds endorse responsible investment to pander to investor preferences.
format text
author LIANG, Hao
SUN, Lin
TEO, Song Wee Melvyn
author_facet LIANG, Hao
SUN, Lin
TEO, Song Wee Melvyn
author_sort LIANG, Hao
title Responsible hedge funds
title_short Responsible hedge funds
title_full Responsible hedge funds
title_fullStr Responsible hedge funds
title_full_unstemmed Responsible hedge funds
title_sort responsible hedge funds
publisher Institutional Knowledge at Singapore Management University
publishDate 2022
url https://ink.library.smu.edu.sg/lkcsb_research/7030
https://ink.library.smu.edu.sg/context/lkcsb_research/article/8029/viewcontent/ResponsibleHedgeFunds_pvoa.pdf
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