Hedge Fund returns spike significantly during the month of December, raising the overall performance and fees managers receive, according to BusinessWeek.

A recent study by researchers at Georgia State, London Business School and Purdue looked at the returns of thousands of hedge funds worldwide and found that before fees, returns averaged 2.5% in December, compared with 0.9% in other months.

By holding back returns from previous months and booking them in December, fund managers can boost their numbers and strengthen their bonuses.

“If managers exceed yearly expectations, they get paid more,” said Narayan Naik, a finance professor at the London Business School .

Last-minute stock purchases in the final days of the month, especially in companies they already own shares of, can raise demand and the price, the study found.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.