Finance Seminar with Nadya Malenko, Ross School of Business, University of Michigan

The Department of Finance is proud to announce the upcoming online seminar with Nadya Malenko, Ross School of Business, University of Michigan.

Nadya Malenko will present: 

Corporate governance in the presence of active and passive delegated investment

ABSTRACT
We examine the governance role of delegated portfolio managers. In our model, investors decide how to allocate their wealth between passive funds, active funds, and private savings, and fund fees are endogenously determined. Funds’ ownership stakes and fees determine their incentives to engage in governance. Whether passive fund growth improves governance depends on whether it crowds out private savings or active funds. In the former case, it improves governance even though it is accompanied by lower fund fees, whereas in the latter case it can be detrimental to governance. Overall, passive fund growth improves governance only if it does not increase fund investors’ returns too much. Regulations that decrease funds’ costs of engagement can be opposed by both fund investors and fund managers even though they are value-increasing.

Find the paper here.

Location and sign up:
This is an online seminar on Zoom.
Please contact us in order to sign up.