Kutatási szeminárium: Money Management and Real Investment

Date: 2024-03-18 Monday, 11:40-13:00   

Venue: Corvinus Main Building E, second floor, room E.279.1. 

Dr. Günter Strobl: Money Management and Real Investment 

Abstract: We propose and analyze an equilibrium model of money management in which the asset allocation decisions of money managers affect the production decisions of firms. The model produces two main results. First, comparing the performance of money managers to that of the overall market portfolio becomes less appropriate as investors (endogenously) choose to delegate more of their money to them. Indeed, as money managers control more money, their holdings get closer to the market portfolio, making it less likely that they outperform it. Second, although money managers may be outperformed by the market portfolio after their fees are taken into account, it is optimal for investors to hire their services. This is because money managers prompt a more efficient allocation of capital, making the economy more productive and firms more valuable in the process. In fact, as we show, the presence of money managers can improve the welfare of all investors, whether or not these investors choose to delegate their investment decisions to money managers. 

 Joint work with Simon Gervais – Fuqua School of Business, Duke University. 

• Read the full paper here: https://unicorvinus.sharepoint.com/:b:/t/CLOUD_FinanceInstitute/EfvmBXWl03xLlei8CI2ljZsBUl_FCjWgtmzLgx4M0FWUhQ?e=hblEaz 
• Visit Dr. Günter Strobl’s website: https://www.gunterstrobl.com/ 
  “Günter Strobl is a Professor of Finance at the University of Vienna. His research interests are in corporate finance, financial intermediation, and asset pricing under asymmetric information.” 
• Consult the list of upcoming seminars on this website  

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