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Portfolio management fees: assets or profits based compensation?

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorGil-Bazo, Javier
dc.date.accessioned2006-11-07T09:22:51Z
dc.date.available2006-11-07T09:22:51Z
dc.date.issued2001-03
dc.description.abstractThis paper compares assets-based portfolio management fees to profits-based fees. Whilst both forms of compensation can provide appropriate risk incentives, fund managers' limited liability induces more excess risk-taking under a profits-based fee contract. On the other hand, an assets-based fee is more costly to investors. In Spain, where the law explicitly permits both forms of retribution, assets-based fees are observed far more frequently. Under this type of compensation, the paper provides some insights into how management fees should be determined in order to solve the principal's trade-off between providing better risk incentives and incurring a lower cost of compensation.
dc.format.extent151930 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.repecwb012207
dc.identifier.urihttps://hdl.handle.net/10016/59
dc.language.isoeng
dc.relation.ispartofseriesWorkings Paper. Bussiness Economics
dc.relation.ispartofseries2001-07
dc.rights.accessRightsopen access
dc.subject.ecienciaEmpresa
dc.titlePortfolio management fees: assets or profits based compensation?
dc.typeworking paper*
dspace.entity.typePublication
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