Network Centrality and Pension Fund Performance

We analyze the relation between the location of a pension fund in its network and the investment performance, risk taking, and flows of the fund. Our approach analyzes the centrality of the fund's management company by examining the number of connections it has with other management companies through their commonality in managing for the same fund sponsors or through the same fund consultants. Network centrality is found to be positively associated with risk-adjusted return performance and growth in assets under management, after controlling for size and past performance, for domestic asset classes; however, we do not find this relation for foreign equity holdings. These findings indicate that local information advantages, which are much stronger among managers holding locally based stocks, exhibit positive externalities among connected managers. Of particular note is that we do not find that the centrality of a manager within one asset class (e.g., domestic bonds) helps the performance of the manager in another asset class (e.g., domestic equity), further indicating that our network analysis uncovers information diffusion effects. Network connections established through consultants are found to be particularly significant in explaining performance and fund flows, consistent with consultants acting as an important information conduit through which managers learn about each other's actions. Moreover, the importance of network centrality is strongest for larger funds, controlling for any economic scale effects. Better connected funds are also better able to attract higher net inflows for a given level of past return performance. Finally, more centrally placed fund managers are less likely to be fired after spells of low performance. Our results indicate that networks in asset management are one key source of the dissemination of private information about security values

Nox4 Is a Protective Reactive Oxygen Species Generating Vascular NADPH Oxidase

Rationale: The function of Nox4, a source of vascular H 2 O 2 , is unknown. Other Nox proteins were identified as mediators of endothelial dysfunction. Objective: We determined the function of Nox4 in situations of increased stress induced by ischemia or angiotensin II with global and tamoxifen-inducible Nox4 −/− mice. Methods and Results: Nox4 was highly expressed in the endothelium and contributed to H 2 O 2 formation. Nox4 −/− mice exhibited attenuated angiogenesis (femoral artery ligation) and PEG-catalase treatment in control mice had a similar effect. Tube formation in cultured Nox4 −/− lung endothelial cells (LECs) was attenuated and restored by low concentrations of H 2 O 2, whereas PEG-catalase attenuated tube formation in control LECs. Angiotensin II infusion was used as a model of oxidative stress. Compared to wild-type, aortas from inducible Nox4-deficient animals had development of increased inflammation, media hypertrophy, and endothelial dysfunction. Mechanistically, loss of Nox4 resulted in reduction of endothelial nitric oxide synthase expression, nitric oxide production, and heme oxygenase-1 (HO-1) expression, which was associated with apoptosis and inflammatory activation. HO-1 expression is controlled by Nrf-2. Accordingly, Nox4-deficient LECs exhibited reduced Nrf-2 protein level and deletion of Nox4 reduced Nrf-2 reporter gene activity. In vivo treatment with hemin, an inducer of HO-1, blocked the vascular hypertrophy induced by Nox4 deletion in the angiotensin II infusion model and carbon monoxide, the product of HO-1, blocked the Nox4-deletion-induced apoptosis in LECs. Conclusion: Endogenous Nox4 protects the vasculature during ischemic or inflammatory stress. Different from Nox1 and Nox2, this particular NADPH oxidase therefore may have a protective vascular function. </jats:sec