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Abstract Hedge fund managers who do well in poker tournaments have better fund performance. This effect is stronger for tournaments with more entrants, larger buy-ins, larger cash prizes, and for… Click to show full abstract
Abstract Hedge fund managers who do well in poker tournaments have better fund performance. This effect is stronger for tournaments with more entrants, larger buy-ins, larger cash prizes, and for managers who place higher or win multiple tournaments. After tournament wins, net flows to the manager’s fund increase significantly. These increases are higher for tournaments with media coverage, when the tournament win is bigger, and for more prestigious tournaments. Along with higher net flows, fund alpha also decreases following the tournament win. Given this, hedge fund investors would be better off investing in an otherwise similar manager without poker tournament success.
Journal Title: Journal of Financial Markets
Year Published: 2020
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