Portfolio management fees: assets or profits based compensation?

Research, Preprint OPEN
Gil-Bazo, Javier;
(2001)
  • Subject: Empresa
    acm: ComputingMilieux_COMPUTERSANDSOCIETY | ComputerApplications_COMPUTERSINOTHERSYSTEMS

This paper compares assets-based portfolio management fees to profits-based fees. Whilst both forms of compensation can provide appropriate risk incentives, fund managers' limited liability induces more excess risk-taking under a profits-based fee contract. On the other... View more
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