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Author ORCID Identifier


Campus-Only Access for Five (5) Years

Document Type


Degree Name

Doctor of Philosophy (PhD)

Degree Program


Year Degree Awarded


Month Degree Awarded


First Advisor

Bing Liang

Second Advisor

Mila Getmansky Sherman

Third Advisor

Farshid Abdi

Fourth Advisor

Anna Liu

Subject Categories

Finance and Financial Management


This dissertation consists of three essays focusing on hedge fund investments. The first essay investigates the effect of partisan conflict on hedge fund performance. In this study, we examine the relationship between the partisan conflict and the investor’s crisis concern by utilizing the newly developed Partisan Conflict Index (PCI) and the risk-return profile of hedge funds. Hedge funds are exposed to substantial tail risk because of their specific trading strategies (Stulz 2007). Therefore, their performance might be impacted by the variation in market crisis concern. We first document that the monthly hedge fund style indices are positively related to PCI innovation in the past month after controlling for common risk factors. Next, we find that hedge funds with higher dependence on PCI innovation are associated with higher tail risk in the future. We also show that hedge funds may chase higher risk-adjusted returns by exploiting the increasing market concern when PCI goes up.

The second essay examines the effect of management structure on hedge fund performance and risk-taking behavior. This essay provides the first study on how the management structure of hedge funds affects their performance and risk. We show that hedge funds managed by a solo manager (SMHs) earn higher abnormal returns compared to those managed by a team of managers (TMHs), even though SMHs have higher idiosyncratic and tail risks. Managers of SMHs show better market timing skills than managers of TMHs. Moreover, SMHs survive longer and are less likely to be liquidated, consistent with SMHs flows being less sensitive to fund performance. Finally, a small sample of funds that switched their management structure confirms our findings.

The third essay studies hedge fund investments in SPACs. Hedge funds play a prominent role in the financing of SPACs, special purpose acquisition vehicles designed to take a privately held firm public by merger. In this essay, we construct a database of hedge fund participation in SPACs between 2003 and 2019 and document their varying roles in the SPAC process. We find that hedge funds took large positions in SPAC shares following the IPO but largely divested from them when the merger deals were completed. Hedge fund ownership at the IPO stage was negatively related to SPAC performance both in the short run following the merger announcement and in the long run following the merger deal completion, raising the question of why hedge funds invest in SPACs to begin with. Hedge fund specific data allow us to document the contribution of SPAC investment strategies to hedge fund performance.