Risk-Taking

28 Jul 2016
By Efficient Capital Management

This study seeks to determine whether there is a connection between a hedge fund manager's survivorship concerns, his risk shifting, and his investment strategy. After analyzing gross fund returns from 1994 to 2014, this study discovers that the incidence of risk shifting decreases when there are strong managerial survivorship concerns. However, risk shifting occurs far less often when algorithms see use, as opposed to a manager's discretion.

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