kaal:claim:2348463-035

Increased disclosure obligations let so-called pilot fish emulate hedge funds' investment strategies and positions, which makes those positions more expensive to build and strips systematic bargaining strength from the negotiation process.

Source quote, verbatim

disclosure obligations, "pilot fish" can increasingly emulate investment strategies and positions. As a result, investment positions can become more expensive and systematic bargaining strength is removed from the negotiation process.

From

Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013), IV. SYSTEMIC RISK DISCLOSURES IN BANKRUPTCY, p. 38
https://ssrn.com/abstract=2348463 · source PDF

Cite as

Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463

Holds when

markets where competitors can observe and copy disclosed positions
illiquid distressed debt markets

Classification

mechanismsupport: arguedfailure: strategy replication through disclosurefamily: disclosure-cost-and-burdendisclosure

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