The Role of Law, Corruption and Culture in Investment Fund Manager Fees

This paper considers an international sample of venture capital and private equity funds to assess the role of law, corruption and culture in setting fund manager fees in terms of their fixed management fees, carried interest performance fees, clawbacks of fees and cash versus share distributions of fees. The data highlight a role of legal conditions in shaping fees paid to fund managers. In countries with better legal conditions, fixed fees are lower, carried interest fees are higher, clawbacks are less likely, and share distributions are more likely. These findings suggest legal conditions help to align the interests of managers and shareholders. More specifically, we examine which element of legal conditions matter most, and discover that corruption levels play a pronounced role in shaping fund manager fee contracts. We also show that cultural forces such as Hofstede's measures of power distance and uncertainty avoidance likewise play a role in influencing fees.Managerial Compensation; Incentive Contracts, Private Equity; Law and Finance

The Role of Law Corruption and Culture in Investment Fund Manager Fees.

This paper considers an international sample of venture capital and private equity funds to assess the role of law, corruption and culture in setting fund manager fees in terms of their fixed management fees, carried interest performance fees, clawbacks of fees and cash versus share distributions of fees. The data highlight a role of legal conditions in shaping fees paid to fund managers. In countries with better legal conditions, fixed fees are lower, carried interest fees are higher, clawbacks are less likely, and share distributions are more likely. These findings suggest legal conditions help to align the interests of managers and shareholders. More specifically, we examine which element of legal conditions matter most, and discover that corruption levels play a pronounced role in shaping fund manager fee contracts. We also show that cultural forces such as Hofstede`s measures of power distance and uncertainty avoidance likewise play a role in influencing fees.Managerial Compensation; Incentive Contracts; Private Equity; Law and Finance;

Mean path length invariance in multiple light scattering

Our everyday experience teaches us that the structure of a medium strongly influences how light propagates through it. A disordered medium, e.g., appears transparent or opaque, depending on whether its structure features a mean free path that is larger or smaller than the medium thickness. While the microstructure of the medium uniquely determines the shape of all penetrating light paths, recent theoretical insights indicate that the mean length of these paths is entirely independent of any structural medium property and thus also invariant with respect to a change in the mean free path. Here, we report an experiment that demonstrates this surprising property explicitly. Using colloidal solutions with varying concentration and particle size, we establish an invariance of the mean path length spanning nearly two orders of magnitude in scattering strength, from almost transparent to very opaque media. This very general, fundamental and counterintuitive result can be extended to a wide range of systems, however ordered, correlated or disordered, and has important consequences for many fields, including light trapping and harvesting for solar cells and more generally in photonic structure design.Comment: Main: 5 pages, 3 figures. Supplementaries: 16 pages, 9 figure