Outside ownership in the hedge fund industry

I examine an action hedge fund managers take to increase their assets under management: selling ownership stakes in firms outside owners. Fund companies that sell owners open more new funds and attract higher flows. The flow impact is greater for who reputable outsiders with asset management divisions. Funds do not subsequently outperform peers. Despite the lack of subsequent outperformance, investors benefit from a reduction returns lower incidence fraud. Taken together, my results indicate these transactions result synergies all parties involved.