Delegated Investment Management in Alternative Assets

Abstract Institutional investors can be segmented into that hold simple portfolios of traditional equities and bonds, manage complex strategies in public private markets. Investors implementing active portfolio management holding diversified bonds are more likely to invest alternative asset classes. The performance institutional assets is significantly lower than equities, suggesting accept returns exchange for diversification benefits. Institutions delegate 90% their investments external managers funds-of-funds. These intermediaries capture large part the potential benefits through higher fees returns. (JEL G11, G23) Received January 10, 2020; editorial decision June 8, 2022 by Editor Andrew Ellul. Authors have furnished an Internet Appendix, which available on Oxford University Press Web site next link final published paper online.