Do Sovereign Wealth Funds Make Informed Investment Decisions?
28 Pages Posted: 9 Jun 2013
Date Written: June 9, 2013
Abstract
Recent studies find that target firm returns are reduced following sovereign wealth fund (SWF) investment. Although risk is also reduced following SWF investment, they find that SWF investment is associated with a reduction in the compensation of risk.In this paper, weexamine the hypothesis that sovereign weal funds’ poor performance is partly due to their poor information about the target firms and find some support for the hypothesis.
Keywords: Sovereign wealth fund, Informed investors, Causality tests
JEL Classification: G15, F34
Suggested Citation: Suggested Citation
Lee, Bong Soo and In, Francis Haeuck, Do Sovereign Wealth Funds Make Informed Investment Decisions? (June 9, 2013). FIRN Research Paper, Available at SSRN: https://ssrn.com/abstract=2276623 or http://dx.doi.org/10.2139/ssrn.2276623
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