Featured Work
Jan 13, 2026
Adrian Aycan Corum, Andrey Malenko, Nadya Malenko
Corporate Governance in the Presence of Active and Passive Delegated Investment
We examine the governance implications of passive fund growth. In our model, investors allocate capital between passive funds, active funds, and private savings, and funds' fees and ownership stakes determine their incentives to engage in governance. If passive funds grow because of easier access to index investing, governance improves, albeit only up to a point where passive funds start primarily crowding out investors' allocations to...
Jan 13, 2026
Andrey Malenko, Nadya Malenko
Voting choice
Traditionally, fund managers cast votes on behalf of fund investors. Recently, there is a shift toward "pass-through voting," with funds offering investors a choice: delegate votes to the fund or vote themselves. We develop a framework to study the implications of voting choice. While it helps reflect heterogeneous investor preferences, it also shapes the informational content of the vote, and these forces can conflict. When...
Jun 5, 2025
Andrey Malenko, Nadya Malenko
| Working Paper No. 00158-00
Voting Choice
Traditionally, fund managers cast votes on behalf of fund investors. Recently, there is a shift towards "pass-through voting," with fund managers offering their investors a choice: delegate their votes to the fund or vote themselves. We develop a theory of delegation of voting rights to study the implications of such voting choice. If investors have heterogeneous preferences, voting choice may decrease investor welfare because investors...
Mar 13, 2019
Asymmetric Information and Security Design under Knightian Uncertainty
We study a signaling game in which an issuer with private information about the distribution of the project’s cash flows designs a security to sell to an uninformed investor to raise financing for the project. The investor faces Knightian uncertainty and evaluates each security by the worst-case distribution at which she could justify the security being offered by the issuer. First, we show that both...
Feb 1, 2019
Asymmetric Information and Security Design under Knightian Uncertainty
We study a signaling game in which an issuer with private information about the distribution of the project’s cash flows designs a security to sell to an uninformed investor to raise financing for the project. The investor faces Knightian uncertainty and evaluates each security by the worst-case distribution at which she could justify the security being offered by the issuer. First, we show that both...
Aug 25, 2018
Ali Kakhbod, Uliana Loginova, Andrey Malenko, Nadya Malenko
| Working Paper No. 00155-00
Advising the Management: A Theory of Shareholder Engagement
We study the effectiveness of shareholder engagement, that is, shareholders communicating their views to management. When shareholders and management have different beliefs, each shareholder engages more effectively when other shareholders engage as well. A limited shareholder base can thus prevent effective engagement. However, a limited shareholder base naturally arises under heterogeneous beliefs because investors who most disagree with management do not become shareholders. Passive funds,...
Dec 13, 2016
Andrey Malenko
| Working Paper No. 00005-00
Proxy Advisory Firms: The Economics of Selling Information to Voters
Proxy advisors play an important role by providing investors with research and recommendations on how to vote their shares. This paper examines how proxy advisors affect the quality of corporate decision-making. We analyze a model in which a monopolistic advisor offers to sell information to shareholders, who decide whether to acquire private information and/or buy the advisor's recommendation, and how to cast their votes. We...
Dec 13, 2016
Andrey Malenko
| Working Paper No. 00004-00
Selling to Advised Buyers
In many cases, buyers are not fully informed about their valuations and rely on the advice of biased experts. For example, the board of the bidder relies on the advice of managers when bidding for a target in a takeover contest. We study the design of sale mechanisms to such "advised buyers". In static mechanisms, such as first- and second-price auctions, advisors communicate a coarsening...
Apr 3, 2016
Andrey Malenko, Nadya Malenko
| Working Paper No. 00156-00
Proxy Advisory Firms: The Economics of Selling Information to Voters
We analyze how proxy advisors, which sell voting recommendations to shareholders, affect corporate decision-making. If the quality of the advisor's information is low, there is overreliance on its recommendations and insufficient private information production. In contrast, if the advisor's information is precise, it may be underused because the advisor rations its recommendations to maximize profits. Overall, the advisor's presence leads to more informative voting only...
