Gemmill, Gordon and Thomas, Dylan C. (2006) The impact of corporate governance on closed-end funds. In: Symposium on European Corporate Governance, Univ Leeds, Leeds, ENGLAND, APR, 2005. Published in: EUROPEAN FINANCIAL MANAGEMENT, 12 (5). pp. 725-746.

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Abstract

This study uses a large sample of UK-listed closed-end funds to examine whether governance has an impact on two indicators of fund performance: the level of fund-management fees and the discount at which a fund trades. Fees are under the control of the directors, and we find that they are inversely related to fund returns, even after allowing for differences across investment sectors. Fees are, on average, higher if a fund has a large board, few directors from outside the fund-family, many directors from within the fund-family, and low ownership by the management company. Discounts for funds are wider if the management company or any blockholder has a significant long-term stake, suggesting that investors are wary of entrenched management. The results suggest that boards are frequently compromised in their duty to shareholders by their dependence on fund-management companies.

Item Type:	Conference Item (UNSPECIFIED)
Subjects:	H Social Sciences > HG Finance
Divisions:	Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	EUROPEAN FINANCIAL MANAGEMENT
Publisher:	BLACKWELL PUBLISHING
ISSN:	1354-7798
Date:	November 2006
Volume:	12
Number:	5
Number of Pages:	22
Page Range:	pp. 725-746
Identification Number:	10.1111/j.1468-036X.2006.00274.x
Status:	Peer Reviewed
Publication Status:	Published
Title of Event:	Symposium on European Corporate Governance
Type of Event:	Conference
Location of Event:	Univ Leeds, Leeds, ENGLAND
Date(s) of Event:	APR, 2005
URI:	http://wrap.warwick.ac.uk/id/eprint/32903

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