SNIRProject reference: 220847
Funded under :
Social networks and idiosyncratic risk in the hedge funds industry
Total cost:EUR 161 792,99
EU contribution:EUR 161 792,99
Coordinated in:United Kingdom
Topic(s):PEOPLE-2007-2-1.IEF - Marie Curie Action: "Intra-European Fellowships for Career Development"
Call for proposal:FP7-PEOPLE-2007-2-1-IEFSee other projects for this call
Funding scheme:MC-IEF - Intra-European Fellowships (IEF)
"The origin of the hedge funds industry goes back to a small group of people that began to invest in it. Over time pioneers turned to people similar to themselves in order to involve them in the industry. This makes this industry created in the image of their founders and constituted of a network of people close and similar to each other. Above all this kind of network formation affects the performance of this industry and its risk. In particular, it is important to analyse the idiosyncratic risk that is defined as the inability of the actors to see important trends issues on account of cognitive myopia. To assess the idiosyncratic risk is necessary to analyze the cognitive myopia of actors that is to analyze whether or not actors think alike. The aim of this project is to assess the idiosyncratic risk in the hedge funds industry by analysing the individual attributes, the social network linking actors and the actors’ perceptions. In particular, this project proposes to establish the extent to which the hedge fund market is open to systemic risk on account of cognitive bias of the actors and to identify which parts of the market are most at risk. To this aim this project will develop quantitative estimates of the networks of the actors that gives real insight into idiosyncratic risk. The project will look at the attributes of the actors and will be based on their network profiles in order to provide insight into what constitutes idiosyncratic risk and the profile of a winning manager. Besides, the project will look at the organizational and network data of about 9.000 hedge funds in order to investigate the organizational and network determinants of their performance. By looking at both the individual and organizational levels of analysis the project will provide insight of the social system’s patterns that characterize the hedge funds industry and their managers and will establish the dimensions of competition and risk at the basis of the hedge funds performance"
EC1V 0HB LONDON
Tel.: 44 (0)20 7040 3038
Fax: +44 (0)20 7040 8975