kaal:claim:2748096-017

The performance pressure on hedge fund managers incentivizes them to take disproportionately high risks in order to deliver sufficient client returns, and those disproportionate risks translate into proportional systemic risks.

Source quote, verbatim

Arguably, in order to obtain sufficient returns for their clients, hedge fund managers are incentivized to take disproportionately high risks in their management strategies, which can translate into proportional systemic risks.

From

Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016), Risk-Management Incentives, p. 7
https://ssrn.com/abstract=2748096 · source PDF

Cite as

Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096

Holds when

holds where managers must generate returns sufficient to retain clients

Classification

mechanismsupport: arguedrisk-and-incentivessystemic-riskprivate-funds

Verify

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Attestation record: colloquium/attestations/224623cf4386d6dd...json
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