Korean System Dynamics Review (한국시스템다이내믹스연구)

Korean System Dynamics Society (한국시스템다이내믹스학회)
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Systems Thinking Perspective on the Sustainable Growth Strategy of Hedge Funds Market

  • Received : 2016.08.31
  • Accepted : 2016.09.26
  • Published : 2016.09.30
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Abstract

This study explores hedge fund characteristics that affect hedge fund performance, namely, fund size, fund age, and performance fee. Previous studies have examined relationships between hedge fund characteristics and fund performance using singular and static thinking to report inconsistent findings without providing full understanding of the causal relationships among variables. To identify that comprehensive causal relationships between hedge fund characteristics and hedge fund performance, this research applies the system dynamics perspective, which allowed demonstration of the interactions within the overall system beyond the singular causal relationships between hedge fund characteristics and performance found in existing traditional research. This study contributes to existing literature in the following ways. First, it overcomes the limitations of singular research methodologies by looking at the integrated system of hedge fund characteristics and fund performance from a bird's eye view based on their dynamic feedback relationships. Second, policy suggestions in terms of regulation and education are presented as growth strategies for the sustainable development of the Korean hedge fund market.

Keywords

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