Fees, performance and risk of Islamic and conventional investment funds: a theoretical and empirical approach.

Summary Islamic and conventional investment funds are similar in that they have the same purpose. However, unlike conventional funds, Islamic funds are required to invest according to a set of selection rules. This thesis is interested in developing a theoretical and empirical framework to explain the management fees, performance and risk of investment funds. Thus, this work begins by developing a theoretical analysis of profit and loss sharing contracts (venture contracts) confronted with asymmetric information problems. A theoretical model, in the presence of adverse selection problems between the manager and the investor, shows that the respective degrees of risk aversion of the manager and the investor have an impact on the negotiation of management fees indexed on the periodic performance of the fund (carried interest). The findings of this model lead us to empirically explain the choice of fund partners regarding the remuneration clauses, performance and risk of investment funds. To do so, we develop a unique database that includes an international sample of Islamic and conventional funds grouped by management company. By distinguishing between Islamic and conventional funds, the legal framework, political and economic conditions explain their fees, performance and risks.