ICPM News April 2016
ICPM Research Committee awards funding to three compelling research papers
In 2016, 15 papers were submitted to our Research Committee for review. Given the quality of submissions, the Research Committee decided to award three prizes this year following a rigorous peer review.
Delivering relevant and valuable pension research is central to ICPM’s mandate and highly valued by Research Partners.
Do Long-Term Investors Improve Corporate Decision Making?
by Jarrad Harford, University of Washington; Ambrus Kecskés, Schulich School of Business at York University; and Sattar Mansi, Virginia Tech
Many pension plans invest in private equity (PE) firms. This paper examines the fee structures across different PE firms and shows how in some cases the general partner in the PE firm is able to extract wealth from the firm reducing the return to other investors.
Private Equity Portfolio Company Fees
by Ludovic Phalippou and Christian Rauch, Said Business School at University of Oxford; and Marc Umber, Frankfurt School of Finance and Management
This paper examines how pension fund governance affects the investment performance of the funds. It contains many new results based on an interesting set of data that both pension plan managers and academic journals would be interested in. The empirical analysis is comprehensive and careful.
Pension Fund Board Composition and Investment Performance: Evidence from Private Equity
by Aleksandar Andonov, Erasmus University Rotterdam; Yael Hochberg, Rice University and NBER; and Joshua Rauh, Stanford University and NBER
Long-term investing and governance issues are of great interest to most pension plans. This paper shows that long-term investors who monitor the investments help improve corporate governance and increase shareholder value by raising profitability and lowering risk. The authors are careful to show that it is the behaviour of the long term investors that lead to these results, and not just that long term investors select well managed investments.