Fund management

Can we spot a Ponzi scheme before it collapses? That question haunts regulators, investors, and journalists alike. But what if some modern investment funds operate on dynamics that, while not technically illegal, closely resemble Ponzi-like behavior? A new paper by Philippe van der Beck, Jean-Philippe Bouchaud, and Dario Villamaina examines whether certain actively managed funds inflate their own performance — and in doing so, unwittingly mislead investors chasing past returns.