Skin or Skim? Inside Investment and Hedge Fund Performance

Hedge funds with more manager inside investment deliver higher performance.

Hedge funds with more manager inside investment deliver higher performance.

Arpit Gupta, Kunal Sachdeva

Management Science 71.4 (2024): 3357–3383

Funds with greater inside investment outperform on a factor-adjusted basis. We attribute this to capacity constraints: insider funds are smaller and less likely to accept excess inflows, suggesting that managers with “skin in the game” prioritize performance over asset gathering.

Paper Data
Cite
@article{gupta2024skin,
  title={Skin or Skim? Inside Investment and Hedge Fund Performance},
  author={Gupta, Arpit and Sachdeva, Kunal},
  journal={Management Science},
  volume={71},
  number={4},
  pages={3357--3383},
  year={2024},
  doi={10.1287/mnsc.2024.4984}
}

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