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In this dissertation, I explore the determinants and implications of the preferences of institutional investors. First, I examine whether institutional investors' preference for local investments is related to informational advantage. Analyzing the equity holdings of a large sample of actively managed mutual funds, I find evidence consistent with the mutual fund industry having a perception that local funds have an informational advantage. However, the portfolio of mutual funds' local holdings does not display significant superior performance relative to the portfolio of their distant holdings. Using a parsimonious model, I hypothesize that the profitability of local informational advantage will be low due to the price impact of trading when there is a relatively large population of local agents who trade on similar private information. Consistent with this hypothesis, I find that funds do earn superior returns on local stocks for which local capital is limited and hence the price impact of local trades is likely to be small. Second, I examine the preferences of institutional investors for firm policies and the relationship between these preferences and firm decisions. I find that institutional investors exhibit systematic differences in their preferences for financial and investment policies. Furthermore, these preferences are related to subsequent changes in the financial and investment policies of the firms they invest. In particular, a firm is more likely to decrease (increase) its leverage ratio if its current leverage is higher (lower) than the preferences of its institutional shareholders. A firm is also more likely to increase (decrease) its investment if its current investment ratio is lower (higher) than the preferences of its institutional shareholders. These findings suggest that the preferences of institutional shareholders are important determinants of corporate policies. / text

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Previous studies on pension provision in Ghana have ignored the impact of the 2008 Pension Reform on the governance and regulatory and solvency risk implications for pension provision in Ghana. The literatures on pension fund investment policy have also ignored the portfolio risk considerations of the absence of a risk-free asset in the domestic currency. However, in many countries, including Ghana, domestic government and corporate bonds carry significant credit risk. This thesis examines three major areas of pension provision in Ghana. Firstly, it examines the implications and challenges of the 2008 Pension Reform for pension provision in Ghana. Secondly, it examines the impact of the 2008 Pension Reform on the solvency and level of pensions of the State Pension Scheme (SPS) in Ghana. Thirdly, it examines the effects of the absence of a risk-free domestic government bond on the investment strategy of a defined benefit pension fund, taking Ghana as an example. The analysis is extended to examine the impact of restrictions placed on pension funds' overseas investments as prescribed by the 2008 Pension Act. It is shown that the inherent weaknesses in Ghana's pension system persist following the 2008 Pension Reforms, that pension provision in Ghana is challenged by several factors, that the governance structure remains broadly unchanged and that further reforms are needed to ensure adequate, equitable and sustainable pensions in Ghana. Several recommendations are made to enhance pension provision in Ghana. Model simulations show that the 2008 Pension Reform has enhanced the level of pensions; however, the reform has worsened the solvency of the SPS, largely as a result of structural and parametric changes affecting the level of contributions. Alternative reform policies are suggested to improve retirement income provision and the solvency of the SPS in Ghana. Analysis using a multi-period asset and liability model indicates that, in the absence of a risk-free domestic government bond and within an adjusted-CAPM framework, the optimal pension fund investment strategy may be a non-corner solution, which requires a higher initial minimum investment. It is found that ignoring the default probability of domestic government debt may lead to serious underestimation of pension fund risks, resulting in an underestimation of the minimum investment requirement. It is also found that the restrictions placed on pension funds' overseas investments, as prescribed by the 2008 Pension Act, impose additional costs on Ghanaian pension funds. JEL Classifications: Asset and Liability Modelling, Adjusted-CAPM, Asset Allocation, Credit Risk, Domestic Government Bonds, Defined Benefit Pension Funds, Default Probability, Economic Scenario Generator, Ghana, Governance, Minimum Investment Required, Overseas Investment Restrictions, Investment Strategy, Longevity Risk, Market Risk, Mortality, Pension Fund Risk, Pension Provision, Pension Policy Review, Pension Population Projection, Pension Reforms, Regulation, Solvency, Stochastic Modelling.

This thesis develops a model of closed end bond funds that helps us better understand a recent finding in the literature. In 2012 Elton et al. published an empirical study of closed end bond funds (CEBFs) and they suggested that the use of leverage in CEBFs could explain the fact that these funds had higher returns than those of comparable open end funds. This thesis provides a framework for estimating the impact of leverage on expected return and risk in this context. We use a Merton type approach to model both unlevered and levered CEBFs. The assets of a CEBF are primarily risky bonds. Each of these risky bonds can be analysed in terms of options under the Merton approach. We create an unlevered CEBF model by extending Merton's model to a multi-firm framework to represent a CEBF composed of several risky bonds. We then add leverage by assuming the CEBF issues debt. This permits us to model the securities of a levered closed end bond fund as compound options. The equity and debt of the CEBF can be decomposed into options on a portfolio of options. This framework enables us to compute the expected rate of return and standard deviation of an unlevered and levered CEBF. We obtain results that are comparable to those observed in Elton et al.

Thesis (M.A.)--Georgia State University, 2007. / Title from file title page. Michael Binford, committee chair; Daniel Franklin, Richard Engstrom, committee members. Electronic text (54 p. : ill. (some col.)) : digital, PDF file. Description based on contents viewed May 8, 2008. Includes bibliographical references (p. 52-54).

Diss. Stockholm : Handelshögskolan, 2001.

Thesis (M.A.)--University of Missouri-Columbia, 2007. / The entire dissertation/thesis text is included in the research.pdf file; the official abstract appears in the short.pdf file (which also appears in the research.pdf); a non-technical general description, or public abstract, appears in the public.pdf file. Title from title screen of research.pdf file (viewed Jan. 7, 2008). Includes bibliographical references.

Thesis (Ph. D.)--University of Texas at Austin, 2008. / Vita. Includes bibliographical references.