Academic literature on the topic 'Investment Manager Characteristics;Strategy and Fund Performance'

The investors of mutual funds can reduce their selection risk by selecting the mutual funds based on certain criteria. One such criterion could be the educational credentials of fund managers. The present study has examined whether performance of mutual funds could be attributed to differentials in educational credentials of fund managers and thereby can provide necessary signals to investors. The study has compared performance and investment strategy of fund managers having management degree from premier management institutions with others having CA/CFA/ICMA qualification. The results show that the performance between these two groups of fund managers does not differ significantly. However, the difference in performance became significant after controlling for various fund characteristics, such as size, expense ratio, liquidity ratio and flow of funds. This suggests that the relation between fund performance and educational credentials may be moderated by control variables. The results showed that the fund managers with a premier management degree were performing better than the other group and that they also followed a more extreme investment strategy. Further, the study has examined whether the relation between educational credentials of fund managers and performance and investment strategy has been impacted by different time periods of economic cycle. The examination in different sub-periods of economic cycle provided better performance of fund managers with premier management education, particularly during crisis period of economy. This performance differential due to educational credentials during the crisis period have been independent of the investment strategy of fund managers.

This study examines the effect of investment fund managers' characteristics in the form of tenure, and mutual fund characteristics with proxy turnover portfolios, market timing and stock selectivity on the performance of stock mutual funds. The research sample is 27 stock mutual funds in Indonesia that were active from 2013 to 2017. On the analysis of the relationships between the characteristics of investment managers and mutual funds characteristics on the performance of stock mutual funds, a series of OLS regressions were run. The panel data regression was included based on using the Eviews. All of the above were aimed at achieving portfolio optimization and realizing the maximization of the interests for fund management companies and investors. The main findings are as follows. Tenure does not affect the performance of stock mutual funds during the years 2013 to 2017, but if divided into 2 quadrants of tenure, namely tenure over 19 years and tenure under 19 years of work, the result is that tenure over 19 years has a positive effect on the performance of stock mutual funds, but tenure brought 19 years has no effect on the performance of equity funds, whereas mutual funds characteristics, which are proxied by portfolio turnover, market timing and stock selectivity, have a significant positive effect on the performance of equity funds in Indonesia. The primary limitation in the scope is the sample, because stock mutual funds that publish consistently Financial statements between 2013 and 2017 are few in number. These findings have important implications for fund management companies as input material that the investment strategy of the investment management team affects the performance of equity funds compared to the characteristics of investment managers with proxies for years of service. This paper proposes a new perspective to evaluate the relationship between the fund manager and mutual funds characteristicsanddivide 2 groups of working years, and calculate them with non-linear models.

The study examines if specific characteristics of funds influence the performance of Saudi equity mutual funds. Previous research has explored various aspects of mutual funds. However, the Saudi Arabia literature focuses on evaluating the funds’ performance. Hence, this study seeks to close this gap by providing a framework to explain the equity fund performance. Several risks adjusted performance measures are applied such as Jensen’s alpha, lower partial moment alpha, Sharpe ratio, LPM-Sharpe ratio using the dynamic panel specification over the period 2010–2019. Based on the LPM alpha, the risk-adjusted return analysis reveals that the Saudi equity funds outperformed their benchmark over the full sample period. The empirical results show that major fund-specific characteristics such as fund size, past performance, and flow explain future performance. Besides, the evidence confirms that Saudi funds benefit from the economies of scale and expertise, while funds requiring higher levels of initial investment tend to exhibit lower performance levels. These findings provide investors and fund managers with useful information to make the optimal investment decisions in the mutual fund industry.

PurposeThis paper aims to provide an empirical evidence on the fund flows-past return performance relationship by also considering the management expense ratio, the portfolio turnover, the fund size and the fund age of Islamic equity funds (IEF) investors in comparison with conventional equity funds (CEF) investors. Design/methodology/approachBy using panel data, the sample of Malaysian domestic managed equity funds is considered which comprises 20 individual funds from IEF and CEF from 2011 to 2013. FindingsThe results provide evidence that IEF investors have different factors when choosing funds in comparison with CEF investors. The study finds that the key factor influencing the fund flows of IEF is the management expense ratio, compared to the CEF which is fund size. This study also shows that all the fund characteristics of IEF and CEF are positively or negatively related to the fund flows. Research limitations/implicationsThe present study may be extended by considering other fund categories such as the money market fund, the balanced fund, the bond fund and the fixed income fund. Practical implicationsThe empirical findings of this paper clearly call for fund managers and investors to review their investment policy. The results could also provide better information and guidance for investors as well policy makers on the factors that affect the fund flow for Malaysian Islamic funds and CEF. Originality/valueThis paper is among the earliest empirical evidence studies on the fund flows-past return performance relationship by focusing in a comparative manner on IEF investors and CEF investors in Malaysia.

Purpose The purpose of this study is to segment and profile socially responsible investment (SRI) funds based on investment strategies they use. Specifically, the paper investigates how different SRI strategies are applied and how they are related to fund-level characteristics, with the goal of recognising their potential dominant combinations in SRI practice. Design/methodology/approach Cluster analysis was complemented with one-way ANOVA to classify 147 SRI funds from 11 European countries into different groups based on the diversification (number and type) and application (intensity of usage) of the investment strategies. Discriminant analysis and chi-square tests were conducted to profile the clusters. Financial performance was examined by running multiple hierarchical regression and dominance analyses to determine meaningfulness of particular investment strategies within each of the SRI fund clusters. Findings Three basic SRI fund clusters were recognised: strong-intensity strategic heterogeneity, weak-intensity strategic heterogeneity and weak-intensity strategic homogeneity. The combination of SRI strategies used in the weak-intensity strategic homogeneity cluster significantly explained the variance in mid-term financial returns. Practical implications Fund managers may use these results to make more informed investment decisions on the selection and the application of SRI strategies. Social implications Financial industry has significant and broad and not only economic but also social implications. This research effort results in better understanding of the SRI universe, potentially leading to a broader consideration of the societal impact of financial investment. Originality/value The author provided useful insights into existing bundles of SRI strategies used in the European SRI market, recognised dominant investment strategies within SRI strategy portfolios and reported how strategic variety is related to fund-level characteristics.

PurposeThis paper aims to analyze the portfolio characteristics and the performance measures of sustainability-themed mutual funds, compared to ethical mutual funds that implement different sustainable and responsible investment strategies.Design/methodology/approachThe study refers to a European sample of 106 ethical funds and 51 sustainability-themed funds. The monthly performance of each fund is downloaded from Bloomberg for the period from January 1996 to December 2015. By applying a Fama and French (1993) three-factor model, the authors overcome the limits of a capital asset pricing model (CAPM) based-single index model, to compare the performance of the two categories of funds.FindingsSustainability-themed funds do not differ significantly from ethical funds in terms of portfolio attributes, except for market capitalization, age and net asset value. Regarding performance measures, the results shows that sustainability-themed funds have a lower underperformance than ethical funds (as measured by Jensen’s alpha), whereas the samples do not differ in terms of market risk (as measured by Beta coefficient). The idiosyncratic risk of sustainability-themed funds is positively influenced by the specific portfolio strategies. The sustainability-themed funds show a higher concentration in the industrial sector and a lower exposure to financial sector than ethical funds; in terms of geographical strategy, they are more global and international oriented; they mainly focus on small caps and value stocks.Research limitations/implicationsThe different sustainable and responsible investment strategies can be applied simultaneously and in a growing number of possible combinations. Mutual fund managers can consider thematic approach as an efficient opportunity for reconciling financial performance and economic sustainability. It is demonstrated that sustainability-themed funds adopt a portfolio strategy significantly different from ethical funds and from the environmental, social and governance benchmarks. Mutual fund managers implement a thematic specialization without any negative impact on the funds returns compared to ethical funds; actually, with a proper diversified portfolio, they are able to reduce idiosyncratic risk.Originality/valueThe analysis is extremely innovative, especially for the thematic sample. During the past 15 years, literature about sustainable and responsible investment has been focused especially on the differences in terms of risk and performance between socially responsible and conventional funds. This paper, starting from the methodology applied in these studies, wants to compare two different types of socially responsible strategies, with a specific focus on sustainability-themed mutual funds, given their exponential growth in the past few years.

Purpose The purpose of this paper is to suggest best practices for managing a successful student-managed investment program (SMIP) based on the experience of the Marquette University’s Applied Investment Management (AIM) program. Design/methodology/approach The authors provide a detailed description of the program curriculum, instructional design, fund structure, program history, fund performance and student outcomes. Findings Through its experiential learning innovations, focus on ethics and close relationships with a dedicated alumni group, the AIM program prepares students for a successful career in investment analysis. Students who graduate from the AIM program experience a significantly higher successful placement rate and higher compensation at their first post-graduation job than finance major students who graduate outside the program. Originality/value This paper provides a detailed description of the distinguishing characteristics of the AIM program and, in doing so, it offers ideas that could be implemented by other SMIPs to improve student satisfaction, proficiency in investment analysis and employment prospects.

PurposeThe portfolio of low-risk stocks outperforms the portfolio of high-risk stocks and market portfolios on a risk-adjusted basis. This phenomenon is called the low-risk effect. There are several economic and behavioral explanations for the existence and persistence of such an effect. However, it is still unclear whether specific sector orientation drives the low-risk effect. The study seeks to answer the following important questions in Indian equity markets: (a) Whether sector bets or stock bets mainly drive the low-risk effect? (b) Is it a mere proxy for the well-known value effect? (c) Does the low-risk effect prevail in long-only portfolios?Design/methodology/approachThe study is based on all the listed stocks on the National Stock Exchange (NSE) of India from December 1994 to September 2018. It classifies them into 11 Global Industry Classification Standard (GICS) sectors to construct stock-level and sector-level BAB (Betting Against Beta) and long-only low-risk portfolios. It follows the study of Asness et al. (2014) to construct various BAB portfolios. It applies Fama–French (FF) three-factor and Fama–French–Carhart (FFC) four-factor asset pricing models in addition to Capital Asset Pricing Model (CAPM) to examine the strength of BAB, sector-level BAB, stock-level BAB and long-only low-beta portfolios.FindingsBoth sector- and stock-level bets contribute to the return of the low-risk investing strategy, but the stock-level effect is dominant. Only betting on safe sectors or industries will not earn economically significant alpha. The low-risk effect is unique and not a value effect in disguise. Both long-short and long-only portfolios within sectors and industry groups deliver positive excess returns. Consumer staples, financial, materials and healthcare sectors mainly contribute to the returns of the low-risk effect in India. This study offers empirical evidence against the Samuelson (1998) micro-efficient market given the strong performance of the stock-level low-risk effect.Practical implicationsThe superior performance of the low-risk investment strategies at both stock and sector levels offers investors an opportunity to strategically invest in stocks from the right sectors and earn high risk-adjusted returns with lower drawdowns over an entire market cycle. Besides, it paves the way for stock exchanges and index manufacturers to launch sector-specific low-volatility indices for relevant sectors. Passive funds can launch index funds and exchange-traded funds by tracking these indices. Active fund managers can espouse sector-specific low-risk investment strategies based on the results of this and similar other studies.Originality/valueThe study is the first of its kind. It offers insights into the portfolio characteristics and performance of the long-short and the long-only variant of low-risk portfolios within sectors and industry groups. It decomposes the low-risk effect into sector-level and stock-level effects.

Purpose The purpose of this paper is to explore the source of apparent abnormal returns accrued by “green” company stocks. Though one cannot completely rule out that market-to-book and size factors may already capture the information of Trucosts’ total damage measure, the authors attempt to attribute the effect to risk, a persistent desirable characteristic or a short-run attention effect. Design/methodology/approach The authors construct portfolios of stocks using the Trucost data for identifying more environmentally friendly companies. The authors then compare the risk-adjusted returns of the green portfolios to the non-green portfolios. A secondary analysis of the price impact of being listed on the Newsweek green company listed is used to determine attention effects. Findings The authors find that green stock returns outperform the most polluting stocks by 3.7 percent per year on a risk-adjusted basis. The evidence is most consistent with a significant but economically small attention effect coupled with a longer lasting and greater magnitude desirable characteristic driving green returns. The authors do not find evidence of a risk-contribution to the performance after controlling for well-known factors. Practical implications Fund managers may benefit from this research in selecting green stocks, and thereby enhancing investment performance, with desirable characteristics without fear of increasing risk. Social implications One social implication is that investing in sustainable and green firms may not only be beneficial for the common good but also for the investor. Increased capital flows, and hence lower borrowing costs, for green firms may assist in creating a more ecologically sustainable economy. Originality/value To the authors’ knowledge this paper unique in attempting to determine if the green premium is a short-run inefficiency resolved by attention or a result of a desirable characteristic.

This dissertation presents five research essays evaluating the performance of managed funds in light of the investment strategy and manager characteristics exhibited by institutional investment companies. An analysis of investment performance with respect to a fund managers strategy provides important information in determining whether performance objectives have been achieved. There are a number of different types of investment strategies managed funds may adopt. However, the primary dichotomy is on the basis of whether the portfolio manager implements either an active or index approach. Active managers attempt to outperform the market through the use of price-sensitive information, whereas a passive manager's objective is to replicate the returns and risk of a target benchmark index. The evaluation of investment manager characteristics is also evaluated. This is motivated on the basis that asset management entities place significant emphasis on both the articulation and differentiation of their investment style relative to competitors, and selling the strengths of their portfolio management skills (in terms of past performance) as well identifying the key individuals comprising their investment team and their unique attributes. For active equity managers, the methods used in constructing portfolios and implementing the investment strategy include security selection, in terms of 'top-down' or 'bottom-up' strategies, value-biased, growth-biased or style-neutral strategies, and portfolios exhibiting market capitalisation biases (i.e. preferences to large or small-cap securities). In terms of active bond portfolio management, the most common strategies include duration management and yield curve positioning. Active managers' strategies are likely to extend beyond stock selection, in particular, where the fund manager adjusts the portfolio's composition in anticipation of favourably capitalising on future movements in the market. For index managers, replication of both the returns and risk of the underlying index may be achieved through either full-replication of constituent stocks comprising the index, or through non-replication techniques (stratified sampling and/or optimisation). Each essay provides a unique contribution to the literature with respect to the performance of active and index funds, as well as an analysis of funds that invest specifically in domestic equities, domestic fixed interest, and diversified funds that invest across the broad spectrum of asset classes. The origins of the performance evaluation literature are ascribed to Cowles' (1933) pioneering work, and the literature has given increasing attention to the topic. However the most fundamental issue considered in almost all previous studies of managed fund performance is the extent to which actively managed portfolios have earned superior risk-adjusted excess returns for investors. The literature has overwhelmingly documented (with a small number of exceptions) that active funds have been unable to earn superior returns, either before or after expenses (e.g. Jensen (1968), Elton et al. (1993), Malkiel (1995), Gruber (1996)). While the international evidence is supported by the few Australian managed fund studies available, Australian research remains surprisingly scarce. This is perplexing considering the sheer size of the investment industry in Australia (around $A717 billion as at 30 June 2001) and the importance placed on the sector with respect to successive Federal Governments' retirement income policies. The objectives of this dissertation therefore involve an analysis of managed fund performance with respect to differences in investment strategies (i.e. active and index), as well as providing an analysis of funds invested in equities, bonds and diversified asset classes (or multi-sector portfolios). The first essay evaluates the market timing and security selection capabilities of Australian pooled superannuation funds. These funds provide institutional investors with exposure to securities across many different asset classes, including domestic and international equities, domestic and international fixed interest, property and cash. Surprisingly, the specific analysis of multi-sector funds is scarce in the literature and limited to Brinson et al. (1986, 1991), Sinclair (1990), and Blake et al. (1999). This essay also evaluates performance for the three largest asset classes within diversified superannuation funds and their contribution to overall portfolio return. The importance of an accurately specified market portfolio proxy in the measurement of investment performance is demonstrated, where the essay employs performance benchmarks that account for the multi-sector investment decisions of active investment managers in a manner that is consistent with their unique investment strategy. This approach rectifies Sinclair's (1990) analysis resulting from benchmark misspecification. Consistent with the literature, the empirical results indicate that Australian pooled superannuation funds do not exhibit significantly positive security selection or market timing skill. Given the evidence in the literature surrounding the inability of active funds to deliver superior returns to investors, lower cost index funds have become increasingly popular as an alternative investment strategy. Despite the significant growth in index funds since 1976, when the first index mutual fund was launched in the U.S., research on their performance is sparse in the U.S. and non-existent in Australia. The second essay provides an original analysis of the Australian index fund market, with specific analysis applicable to institutional Australian equity index funds offered by fund managers. While indexing is theoretically straightforward, in practice there exist potential difficulties in exactly matching the return of the underlying index. Therefore the magnitude of tracking error is likely to be of concern to investors. This essay documents the existence of significant tracking error for Australian index funds, where the magnitude of the difference between index fund returns and index returns averages between 7.4 and 22.3 basis points per month for funds operating at least five years. However, there is little evidence of bias in tracking error, implying that these funds neither systematically outperform or underperform their benchmark on a before cost basis. Further analysis documents that the magnitude of tracking error is related to fund cash flows, market volatility, transaction costs and index replication strategies used by passive investment managers. The third essay presents evidence of the performance of U.S. mutual funds, where attention is given to both active and index mutual funds for which the applicable benchmark index is the S&P 500. This essay examines both the magnitude and variation of tracking error over time for S&P 500 index mutual funds. The essay documents seasonality in S&P 500 index mutual fund tracking error, where tracking error is significantly higher in the months of January and May, together with a seasonal trough in the quarters ending March-June-September-December. Statistical evidence indicates tracking error is both positively and significantly correlated with the dividend payments arising from constituent S&P 500 securities. In terms of a performance comparison between actively managed and index funds, active funds on average are found to significantly underperform passive benchmarks. On the other hand, S&P 500 index mutual funds earned higher risk-adjusted excess returns after expenses than large capitalisation-oriented active mutual funds in the period examined. These results suggest the S&P 500 is consistent with capital market efficiency, implying an absence of economic benefit accruing to the average investor utilising actively managed U.S. equity mutual funds. The fourth essay presented in the dissertation examines the performance of Australian investment management organisations with direct reference to their specific characteristics and strategies employed. Using a unique information source, performance is evaluated for actively managed institutional balanced funds (or diversified asset class funds), Australian share funds and Australian bond funds. Performance is evaluated with respect to the investment strategy adopted, the experience and qualifications held by investment professionals, and the tenure of the key investment professionals. This essay also evaluates the performance of senior sector heads to determine the skills of individuals driving the investment process, even though these individuals may migrate to competitor organisations. The essay finds evidence that a significant number of active Australian equity managers earned superior risk-adjusted returns in the period, however active managers perform in line with market indices for balanced funds and Australian bond funds. A number of manager characteristics are also found to predict risk-adjusted excess returns, systematic risk and investment expenses. Of particular note, performance of balanced funds is negatively related to the institution's age and the loyalty of non-senior investment staff. Performance is also found to be significantly higher for managers that predominantly operate their portfolios using a bottom-up, stock selection approach. Interestingly, the human capital of managers, measured as the years of tertiary education undertaken, does not explain risk-adjusted excess returns. Systematic risk is positively related to an institutions age and negatively related to both senior manager loyalty and the implementation of bottom-up portfolio management strategies. In terms of management expenses, fees are directly related to the Australian equities benchmark allocation, the years of tertiary education, the number of years service (loyalty) for non-senior investment professionals and the total years experience of senior money managers. This concluding essay also documents that changes in top management have significant performance effects. In the 12-month period after a change in fixed income director or chief investment officer, performance is significantly lower and significantly higher, respectively. There is no significant difference in performance where changes in top management occur for Australian equities. The years of service (loyalty) provided to asset management firms by equities directors is inversely related to risk-adjusted return. The fifth and final essay examines the investment performance of active Australian bond funds and the impact of investor fund flows on portfolio returns. This essay represents a significant and original analysis in terms of its contribution to the literature, given the absence of Australian bond fund performance analytics and also the limited attention provided in the U.S. Both security selection and market timing performance is evaluated using both unconditional models and conditional performance evaluation techniques, which account for public information and the time-variation in risk. Overall, the results of this essay are consistent with the U.S. and international mutual fund evidence, where performance is found to be consistent with an efficient market. While actively managed institutional funds perform broadly in line with the index before expenses, the paper documents significant underperformance for actively managed retail bond funds after fees. The study also documents that retail fund flows negatively impact on market timing coefficients when flow is not accounted for in unconditional models.

PhD
Thesis (PhD (Business Management))--Stellenbosch University, 2008.
The objective of this study is to provide a new approach to assessing fund management and to establish whether there is empirical support for this approach. The new approach will improve investors’ decision making with respect to the management and investment of their assets. We construct equity-only funds from quarterly equity holdings of unit trusts. The funds are ranked each quarter using various performance measures and segmented into winners and losers; firstly according to the median of the ranks and secondly according to quintile rankings. The funds’ rankings are examined for evidence of persistence. Secondly, a performance attribution method is introduced that identifies the static (“buy-and-hold”) portion and the trading portion of a fund. The funds are examined in terms of characteristics that distinguish between funds according to how the manager has chosen to organise (or construct) the fund. These characteristics are the static portion, the trading portion, the size of the static portion and the extent of the overlap between funds’ holdings and the large, mid and small capitalisation indices. Relationships between winners and losers (based on quartiles) and the fund characteristics are examined. Finally, the trading activities of investment managers, for their funds, are examined. This examination begins with the use of traditional measures that focus on a holistic approach to evaluating trading ability. The examination is enhanced with the introduction of a new reductionism approach, where the success of individual trades is examined. The results of the earlier performance attribution are included in the evaluation of investment managers’ abilities to add value to investors’ assets via trading activities.

Thesis (MBA)--Stellenbosch University, 2003.
ENGLISH ABSTRACT: This paper investigates fund manager performance in order to determine whether some fund managers are better than others. The focus of the paper is to examine if fund performance is related to the characteristics of fund managers that may indicate ability, knowledge, or effort. The data consists of South African regulated unit trust growth and growth-and-income funds investigated over a seven-year period, and comprehensive and detailed information on the various fund managers supplied by the MoneyMate database from the University of Stellenbosch. The research objective has been to find out whether fund manager characteristics help explain fund performance and risk. Stepwise regression analysis as the research methodology is applied, where the two dependent variables, performance and risk, are regressed on the eight independent variables; manager age, tenure of the manager with the fund, years of education, whether the manager hold a MBA or CA/CFA qualification, management team size, fund age and fund objective. The findings of the study are highly significant and show that fund performance and risk are impacted upon by managers' qualifications. One can expect better risk-adjusted performance from a fund manager who holds a CA/CFA and/or MBA qualification. Results show that these managers outperform managers without these qualifications.
AFRIKAANSE OPSOMMING: Hierdie studie ondersoek fondsbestuurder prestasie met die doel om te bepaal of sommige bestuurders beter is as ander. Die fokus van die studie ondersoek of fondsprestasie verband hou met die eienskappe van fondsbestuurders. Die data bestaan uit Suid-Afrikaanse effektetrust groei en groei-en-inkomste fondse bestudeer oor 'n periode van sewe jaar, en omvattende besonderhede van die fondsbestuurders soos verskaf deur die MoneyMate databasis van die Universiteit van Stellenbosch. Die doel van die navorsing is om bewyse te vind wat mag aandui dat fondsbestuurdereienskappe wel fondsprestasie en risiko's kan beïnvloed en verduidelik. Die metode van stapsgewyse regressie word toegepas, waar die impak van die agt onafhanklike veranderlikes (ouderdom van die fondsbestuurder, sy jare by die fonds, sy aantal jare van tersiêre onderrig, of die bestuurder 'n MBA of CA/CFA kwalifikasie besit, spangrootte, ouderdom van die fonds en die fonds se doelstelling) op die twee afhanklike veranderlikes (prestasie en risiko) ondersoek word. Die bevindinge van die studie is hoogs betekenisvol en dui daarop dat 'n fonds se prestasie en risiko's wel beïnvloed word deur die kwalifikasies van die fondsbestuurder. Beter risiko aangepaste prestasies kan verwag word van bestuurders wat 'n MBA en/of CA/CFA kwalifikasie besit. Die resultate toon wel dat fonds bestuurders ander bestuurders uitpresteer wat nie daardie kwalifikasie besit nie.

Social media companies have increasingly used global stock exchanges to raise fresh capital needed to expand and commercialise their business models. Despite the soaring proliferation of social media interactions and improving economic fundamentals, many of the high-profile IPOs have underperformed on debut and in secondary trading. This chapter seeks to identify success and failure factors of social media stock market flotations from the operational, industrial and financial perspectives. The research features flagship social media IPOs comprised by the most representative social media Exchange Traded Fund (ETF), the Global X Social Media Index ETF (SOCL), which replicates the price and return performance of the globally recognised Solactive Social Media Total Return Index. The analysis sums up the early evidence of IPO organisation with regard to social media issuers and posits three decisive factors in this process related to: flotation timing, pricing and pre-IPO business integration. The research offers some practical recommendations for future social media IPOs as well as directions for further academic studies at the interface of social media industrial, economic and capital market activity. The following takeaways concerning social media IPOs emerge from the study: 1) Staging and timing: social media companies should mull flotations when a clear-cut path toward cash generation and accrual profits is observable (chronically cash deficient and unprofitable social media tend to underperform on debut and in post-IPO trading) and amid protracted bull markets so as to raise the odds of a propitious IPO climate; 2) Organisation and management: the success of social media going public decisions is a function of seamless IPO organisation (including conservative pricing, share dilution tied to envisaged liquidity and capital expenditure as well as trading and clearing system reliability); 3) Issuer characteristics: social media IPOs are facilitated by businesses commanding a dominant position on the home market, having a diversified core business (including exposure to non-media operations), coming on the stock market either as industry trendsetters or in the wake of successfully executed IPO benchmarks; 4) Factor coalescence: no isolated factor discussed in this chapter can fully explain the performance of a social media IPO – it is rather their combination and interconnectivity that can comprehensively attest to the success or failure of a going public strategy employed by a social media company. From the investment standpoint, the case study analysis demonstrates that a case-by-case (rather than sectoral) approach needs to be adopted for investors seeking to derive gains from social media IPOs, as passive exposure to the entire industry (e.g. via index tracking) is not per se a guarantor of market competitive investment performance.