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Delegated Investment Management in Alternative Assets

Author

Listed:
  • Aleksandar Andonov
Abstract
Institutional investors can be segmented into investors that hold simple portfolios of traditional equities and bonds, and investors that manage complex strategies in public and private markets. Investors implementing active portfolio management and holding diversified portfolios of equities and bonds are more likely to invest in alternative asset classes. The performance of institutional investors in alternative assets is significantly lower than in equities, suggesting that investors accept lower returns in exchange for diversification benefits. Institutions delegate 90% of their alternative investments to external managers and funds-of-funds. These intermediaries capture large part of the potential diversification benefits through higher fees and lower returns. (JEL G11, G23)Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Suggested Citation

  • Aleksandar Andonov, 2024. "Delegated Investment Management in Alternative Assets," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 13(1), pages 264-301.
    • Handle: RePEc:oup:rcorpf:v:13:y:2024:i:1:p:264-301.
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    File URL: http://hdl.handle.net/10.1093/rcfs/cfac027
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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