Do physically attractive hedge fund managers have a major advantage?
We talked yesterday about the seemingly random nature of hedge funds, which have a better chance stinking it up following a good year than putting together two consecutive successful campaigns. Now, we may have a reason. Investors are apparently funneling all their assets to hotties and beefcakes.
A new study from Tel Aviv University suggests that investors are more likely to give their money to attractive hedge fund managers than their less visually appealing counterparts, which, on the whole, are more successful in the markets.
The study used dozens of publicly available photographs of hedge fund managers and had respondents assess their personal characteristics, including age and attractiveness. They then came up with a “trustworthiness” rating based solely on the photographs.
Researchers found that the personal appearance of the hedge fund manager played a “dominant” role in their trustworthy rating. Moreover, the managers who were deemed trustworthy, based mainly on how attractive they were, shouldn’t necessarily be trusted, at least when compared to those who looked "undependable.”
"On the contrary, we found that the 'trustworthy' managers tended to make less money for investors and more money for themselves by leveraging the way they looked and how they presented themselves,” said lead author Dr. Roy Zuckerman. “'Untrustworthy' execs were found to charge lower fees and generate more income for investors and less for themselves."
So, the moral of the story is if you are attractive, launch a hedge fund. And if you have money to invest, find the ugliest hedge fund manager on the block and give them every dime. (But seriously: don’t do either of those things).
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