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Empirical Studies in Asset Management



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Ohneberg, Elias Leonhard 


The dissertation presents three empirical studies in the field of asset management. The first essay investigates whether within-firm connections alter manager career concerns and if investment distinctiveness, employee risk-taking and fund performance are affected. I measure connectedness using a dataset of within-firm networks based on 13,357 mutual fund managers across 26 years. Well-connected managers within the fund family face lower performance-turnover and -promotion sensitivities. The advantageous treatment enjoyed by better-connected managers in these career altering decisions is associated with lower risk-taking and lower investment distinctiveness of the funds they manage. Funds of better-connected managers deviate less from their peers in systematic factor and sector exposures and exhibit lower risk-adjusted performance. Mutual fund investors are unaware of this phenomenon, illustrated by the lack of a flow differential.

The second essay uses proprietary data on self-reported employee reviews from to study the relationship between employee satisfaction and mutual fund performance and size. Using the staggered adoption of Anti-SLAPP (Strategic Lawsuits Against Public Participation) laws in the U.S. and variation from mergers between asset management companies to tackle endogeneity issues, we find that employee satisfaction is positively linked to fund performance and size but that only performance-critical employees' satisfaction matters. A one-point increase on the 5-point scale of employee satisfaction leads to a 36bps (36bps) higher annual 3-factor (4-factor) abnormal performance. Furthermore, a one-point increase of employee satisfaction is associated with a 0.2% larger mutual fund size. Finally, while there is a positive effect of employee satisfaction on risk-taking, we cannot establish a causal relationship.

The third essay investigates why fund families continue to outsource the portfolio management of their funds to unaffiliated investment advisors despite the well-documented underperformance of outsourced funds. Our empirical analysis shows that investment expertise, or the lack of it, drives the decision to enter an outsourcing relationship and impacts the way fee revenues are shared. Furthermore, market thickness, defined as the number of subadvisors the fund family could contract with, also impacts the fund family's decision to outsource and its relative bargaining power in the resulting relationship. We link the impact of market thickness on the relative power of both parties in the outsourcing relationship to the threat of dismissal of the subadvisor and show that outsourced funds operating in thick markets perform better. Finally, once we account for the initial decision to outsource a mutual fund, we find that outsourced funds do not underperform and are not smaller than in-house managed funds. The fund family lacking the relevant in-house expertise could not have achieved a better performance than the subadvisor and the subadvisor, because of its lack of distribution capabilities, could not have gathered more assets.





Chambers, David
Saffi, Pedro


Employee Satisfaction, Incentives, Mutual Fund, Outsourcing


Doctor of Philosophy (PhD)

Awarding Institution

University of Cambridge
Economic and Social Research Council (2078692)
Economic and Social Research Council Cambridge Judge Business School