Peter DeMarzo
Institution
Stanford University
PhD Year
1989
pdemarzo@stanford.edu
FTG Membership
Fellow
Website
https://www.gsb.stanford.edu/faculty-research/faculty/peter-m-demarzo
Featured Work
Mar 8, 2026
A Unified Theory of Delegated Capital Management
We develop a unified theory of delegated capital management that extends the competitive, rational-expectations paradigm of Berk and Green (2004) from mutual funds to alternative assets. With perfectly competitive capital markets, we derive the optimal contract and account for observed regularities—performance fees, persistent alpha, fee dispersion, and binding limits on fund size. The key distinction between mutual funds and alternatives is the liquidity and opacity...
