Forbes -A new research study indicates with empirical data that hedge funds receiving both seeding and operational support from a larger investment organization or service provider tend to outperform the broader hedge fund universe on a risk-adjusted basis.
The findings of the research study are outlined in “Hedge Fund Incubation, Development and Performance,” a white paper co-authored by George Martin, Associate Director at the Center for International Securities and Derivatives Markets (CISDM), Isenberg School of Management, University of Massachusetts, Amherst, and Joseph Pescatore, Managing Director at Jefferies Asset Management, LLC.
“Hedge Fund Incubation, Development and Performance” presents important new empirical information about the performance effects on hedge funds of institutional affiliation between hedge funds and larger investment organizations or service providers, such as investment banks, fund of funds or other multi-strategy allocators, or service providers. The paper identifies and discusses the many ways that hedge funds and larger institutions choose to enter into business relationships, and broadly discusses the institutional economics of those relationships, as well as why some types of relationships may be preferred by managers, institutions and investors.
