Managerial Multitasking in the Mutual Fund Industry

41 Pages Posted: 16 Jan 2011 Last revised: 11 Apr 2018

See all articles by Vikas Agarwal

Vikas Agarwal

Georgia State University; University of Cologne - Centre for Financial Research (CFR)

Linlin Ma

Peking University HSBC Business School

Date Written: May 23, 2012

Abstract

We examine the determinants and consequences of the multitasking phenomenon in the mutual fund industry where fund managers simultaneously manage multiple funds. We show that well-performing managers multitask either by taking over poorly performing funds within fund companies (i.e., acquired funds) or by launching new funds. We find that funds managed by managers prior to multitasking (i.e., incumbent funds) experience significant performance deterioration subsequent to multitasking while the performance of the acquired funds improves. Although there is no change in the investor flows into the incumbent funds, the acquired funds and new funds attract greater investor flows. As a result, multitasking arrangement increases the assets of fund companies. Taken together, these findings are indicative of potential agency problems associated with managerial multitasking.

Keywords: Multitasking, Fund Performance, Fund Flows, Agency Problems

JEL Classification: G10, G20, G23

Suggested Citation

Agarwal, Vikas and Ma, Linlin, Managerial Multitasking in the Mutual Fund Industry (May 23, 2012). AFA 2011 Denver Meetings Paper, Fifth Singapore International Conference on Finance 2011 , Available at SSRN: https://ssrn.com/abstract=1741282 or http://dx.doi.org/10.2139/ssrn.1741282

Vikas Agarwal (Contact Author)

Georgia State University ( email )

35 Broad Street,
Suite 1221
Atlanta, GA 30303-3083
United States
404-413-7326 (Phone)
404-413-7312 (Fax)

HOME PAGE: http://vagarwal.gsucreate.org/

University of Cologne - Centre for Financial Research (CFR) ( email )

Albertus-Magnus Platz
Cologne, 50923
Germany

Linlin Ma

Peking University HSBC Business School ( email )

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
556
Abstract Views
2,671
Rank
63,725
PlumX Metrics