Do Sovereign Wealth Funds Make Informed Investment Decisions?

28 Pages Posted: 9 Jun 2013

See all articles by Bong‐Soo Lee

Bong‐Soo Lee

Florida State University

Francis Haeuck In

Monash University - Department of Accounting; Financial Research Network (FIRN)

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

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

Bong Soo Lee (Contact Author)

Florida State University ( email )

Tallahasse, FL 32306
United States

Francis Haeuck In

Monash University - Department of Accounting ( email )

Building 11E
Clayton, Victoria 3800
Australia
+61 3 9905 1561 (Phone)
+61 3 9905 5475 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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