Discussion paper

DP12010 Are Mutual Fund Managers Paid For Investment Skill?

Compensation of mutual fund managers is paramount to understanding agency frictions in asset delegation. We collect a unique registry-based data set on the compensation of Swedish mutual fund managers. We find a concave relationship between pay and revenue, in contrast to how investors compensate the fund company (firm). We also find a surprisingly weak sensitivity of pay to performance, even after accounting for the indirect effects of performance on revenue. Firm-level revenues and profits add substantial explanatory power for compensation to manager-level revenue and performance, highlighting the importance of the mutual fund firm.


Van Nieuwerburgh, S, R Vestman, R Kaniel and M Ibert (2017), ‘DP12010 Are Mutual Fund Managers Paid For Investment Skill?‘, CEPR Discussion Paper No. 12010. CEPR Press, Paris & London. https://cepr.org/publications/dp12010