Cremers, finance professor at the University of Notre Dame’s Mendoza College of Business, was just named as the winner
of a significant research award by the nonprofit professional association and
credentialing organization, Investment
Management Consultants Association (IMCA).
Cremers’ winning paper,
Market Outperformance: Publicly Traded Affiliates of Multinational Corporations,”
received IMCA’s Second Annual Academic Paper Competition award. The paper analyzes
the strong performance of emerging market affiliates of corporations
headquartered in developed countries and offers two main reasons for the
outperformance: improving corporate governance and the stabilizing role of the
The paper examines
overall emerging market stock performance from June 1998 to June 2011, noting
that emerging markets significantly outperformed developed markets, but with
markedly more volatility of equity returns and greater downside volatility.
“I wanted to investigate
whether it mattered how you invest in emerging markets: directly in local
stand-alone companies, through international companies doing significant
business in emerging markets, or in their affiliates trading in local markets.
My conclusion is that these affiliates seem to provide the best combination of
exposure to emerging market growth and developed market governance,” said
“I’m honored that my
research paper is recognized by the Journal of Investment Consulting, and I
hope investors are able to benefit from my research.”
Cremers, a native of the
Netherlands, joined the University of Notre Dame as professor of finance in
2012. Before that, he was on the faculty at Yale School of Management from
2002–2012. His research focuses on empirical issues in investments and
corporate governance, and he teaches courses on fixed income markets and
corporate governance to Notre Dame MBA and undergraduate students.
His paper, “How active is your fund manager? A new measure that
predicts performance” (published in 2009 in the Review of Financial Studies), introduced a measure of active
management named Active Share, which is based on a comparison of the holdings
of a fund with those of its benchmark. The Active Share measure has become
widely used in the financial industry and was incorporated in Morningstar
Direct and FactSet.
Cremers earned a Ph.D.
in finance from the New York University Stern School of Business.
“Emerging markets play a
critical role in many investment portfolios,” said Margaret M. Towle, Journal of
Investment Consulting editor-in-chief. “In his analysis, Professor
Cremers offers important insight into why some companies in emerging markets
have performed so well.”
The competition called
for papers on topics that examine recent research relevant to investment
consulting and private wealth management, and provide a development of theory
and applied research on the chosen topic. The
Journal of Investment Consulting editorial advisory board selected the
winning paper based on quality and relevancy of the research to investment
management consultants and investment advisors.
The paper will be
published in the next issue of the Journal of
Investment Consulting due to be published in spring 2014, and Cremers
will receive a $5,000 cash award.
Visit www.IMCA.org for more information.