Other people's money: A comparison of institutional investors

Date
2022-12
Advisor
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Co-Advisor
Co-Supervisor
Instructor
Source Title
Emerging Markets Review
Print ISSN
1566-0141
Electronic ISSN
1873-6173
Publisher
Elsevier
Volume
53
Issue
Pages
100914-1 - 100914-26
Language
English
Type
Article
Journal Title
Journal ISSN
Volume Title
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Abstract

Using unique equity ownership data, we investigate the stock picking preferences and return forecasting performances of institutional investors that manage their own money against those that manage others’. We reveal that these investors’ preferences significantly differ in historical patterns, liquidity and prudence when picking stocks. In particular, ‘own money managers’ display a risk-seeking behaviour whereas “others’ money managers” exhibit risk-averse characteristics. However, our results indicate that both types of investors are well informed, albeit own money managers excel in the short-term while others’ money managers are successful in the long-term.

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Book Title
Keywords
Informed trading, Institutional investors, Proprietary trading, Risk preference
Citation
Published Version (Please cite this version)