Cross-group Information Exchange And Hedge Fund Performance

With the rapid development of hedge funds,hedge fund managers,as a key factor affecting the performance of hedge fund products,have aroused many scholars’ interest in their research.This paper refers to the structural hole theory in the social network analysis method,constructs the Chinese hedge fund manager work relationship network,selects the 4886 hedge fund sample data from april 16,2010 to december 31,2017 in China to carry on the empirical research,analyzes the cross-group information exchange within the hedge fund manager work relationship network,and examines the relationship between the structure hole of the Chinese hedge fund manager’s position in the cross-group information exchange within the network and the fund manager’s corresponding fund product performance.The main empirical results of this paper show that under the cross-group information exchange in the hedge fund manager work network,the strong structural hole characteristics of the manager’s network position have a negative effect on the performance of the fund products they manage.Structural hole theory holds that when there are structural holes between network members,the individuals in the key position of structural holes as a key bridge between the two groups will have the maximum potential to obtain information and opportunities.However,the research results of applying the theory in Chinese hedge fund field found that although hedge fund managers can have strong cross-group information acquisition and control ability based on their strong structure location in the work network,this positive effect is more likely to be offset by the negative effect on the other side and have a reverse effect on fund performance.The formation of these negative effects may be related to information interference and crowd behaviour resulting from group communication.The research in this paper enriches the relevant literature in the research field of hedge fund and social relationship network,and considers the work relationship in hedge fund industry as a kind of important social network relationship separately,which is helpful to understand the work relationship and economic behavior under the special culture of China.At the same time,the results of this paper not only provide referenceinformation for investors’ investment decisions but also contribute micro-factors to the performance attribution study of hedge funds in China.