Multi-fund managers are defined to be low-match managers or high-match managers according to whether they hold low or high fraction of common holdings across the different funds they manage. I show that high-match managers perform significantly better than lowmatch managers. The star performance of a fund results in high level of new money flows not only to the fund but also to other funds managed by its manager. Therefore, all multi-fund managers have an incentive to create low-match portfolios in order to increase the probability of generating at least one star fund. However, high-ability managers have high-match portfolios because they can identify good stocks and hold these stocks in all of their funds.
YADAV, V. (2011). Portfolio matching by multi-fund managers: Effects on fund performance and flow.