An Empirical Study Of The Performance Of Fund Managers Who Transfer From Public To Private

Sunshine private fund is the fund issued by the trust company, filed in the regulator, with regular performance reports, and whose money is under third party’s trusteeship and invested in stock market. The third party custodian guarantees the security of the investors’ assets. Besides, being more standardized and transparent than the average private fund, while more flexible and profitable than the public fund, the sunshine private fund boosts in recent years and has grow into a strength that must not be overlooked. However, the lack of academic research in this area contrasts unfavorably with the rapid development of Sunshine private fund, therefore, study in deeper level allows of no delay.On the other hand, since2006the establishment of the first Sunshine private fund which a former public fund manager was in charge, over the last8years, more than90public fund managers opted to continue their careers in the Sunshine private fund. Why did they make this decision? What is the present state of their performance? At present, the study of the "job-hopping" of fund managers limited to the staff movement among the public funds, little scholars pay attention to the transferring to the Sunshine private fund.In summary, this paper intends to focus on the sunshine private fund managers who have the public fund background, measures their stock selection ability and market timing ability in each career stage, therefore to expand the current academic study of the phenomenon of fund manager jumping from public to private. The conclusion of the empirical study, for the one hand, can provide references for the future development of sunshine private fund and the salary reform of the public fund, on the other hand, can offer advises for investors and fund managers.This paper has deeply researched the phenomenon of fund manager jumping from public to private in theoretical aspect and empirical aspect. In theoretical aspect, the paper has mainly introduced the foreign classical theories about fund performance evaluation and then makes a comparison between the public fund and sunshine private fund. In empirical aspect, this paper using the model of TM-FF3to test the stock selection and market timing ability of77equity public funds and216sunshine private funds, which are used to be operated by41fund managers who has jump from public to private. And t-test is applied to figure out whether there exists significant difference between performances in two stages.Through empirical research, it comes to the conclusions as follows:Firstly, public funds show positive stock selection ability but negative market timing ability, none of them are significant; for sunshine private funds, both of the stock selection ability and market timing ability is non-significant negative.Secondly, after the fund manager swap from public to private, the stock selection ability experienced a significant backset, possibly for the reason of losing the support of public funds’ investment research capacity; as for the market timing ability, although it is still negative, it does make a non-significant progress.Thirdly, no enough evidence shows that sunshine private fund’ payment system can improve performance.Lastly, although the traditional models behave well in evaluating the public funds, but their explanatory for sunshine private fund is weak.