Toronto CFA Society and Hillsdale's $10,000 Award for Canadian Investment Research Goes to Rotman for Pension Research
TORONTO, March 1, 2012
TORONTO, March 1, 2012 /CNW/ - Toronto CFA Society and Hillsdale
Investment Management announce that Alexander Dyck and Lukasz Pomorski
at The Rotman International Centre for Pension Management have won
their 2012 Canadian Investment Research Award.
Toronto CFA Society and Hillsdale Canadian Investment Research Award is
open to global researchers conducting research related to Canadian
capital markets, including both academics (professors and students) and
practitioners. Submissions on topics, such as portfolio and risk
management, asset valuation and performance measurement, are judged on
the potential contribution of their applied research to Canadian
capital markets. Toronto CFA Society and Hillsdale Investment
Management offer this prestigious award annually to encourage
high-quality research on investment management.
The winning research paper, "Is Bigger Better? Size and Performance in
Pension Plan Management," was selected by a panel of judges from among
12 submissions. Toronto CFA Society and Hillsdale Investment Management
will award a $10,000 CAD prize to the winners today at the Toronto CFA
Society 2nd Annual Award Reception.
"This paper by Professor Dyck and Professor Pomorski makes very valuable
contributions to pension plan management discussions, " said Chris
Guthrie, CFA, President & CEO, Senior Portfolio Manager and Founding
Partner, Hillsdale Investment Management. "The authors do an
exceptional job of exploring how larger defined benefit pension plans
succeed at overcoming the diseconomies of scale typically seen at the
fund level to achieve superior returns. Both Hillsdale and Toronto CFA
Society are proud to recognize their excellent research."
Rotman researchers used CEM Benchmarking data covering more than 800
global defined benefit pension plans to assess the impact of size on a
pension plan's performance. "Larger DB plans earn better returns across
the board, but the advantage of size appears to be more pronounced in
plans with strong governance practices," said Professor Pomorski. "Most
of the outperformance is driven by cost savings arising from in-house
investment capabilities and superior returns achieved by investing in
alternatives to stocks and bonds," he said. The researchers concluded
that "bigger is better when it comes to pension plans."
Larger DB plans outperform smaller plans by about 0.5% (43-50 basis
points) per year.
This difference in performance means that a participants' retirement
savings in a larger DB plan (the top 20% by size) could be 13% greater
at retirement than savings in a smaller plan (the bottom 20% by size).
Up to half of the performance gains arise from lower investment costs
due to internal management, which costs at least three times less than
external management fees.
The majority of the superior returns comes from expansion into
alternative asset classes, such as private equity, real estate and
infrastructure, where size and direct investment capabilities are an
advantage. Large plans have both lower costs and higher gross returns
for alternative investments, yielding up to a 6% improvement in returns
There is suggestive evidence that strong governance practices contribute
to higher returns and a greater ability to take advantage of scale
Download a copy of "Is Bigger Better? Size and Performance in Pension
Plan Management" at www.torontocfa.ca. A fact sheet with additional research findings and background is also
available on Toronto CFA Society's website.
About the winners Alexander Dyck is a Professor of Pension Management at The Rotman
International Centre for Pension Management and teaches finance and
business economics at the University of Toronto's Rotman School of
Management. Previously, he was an assistant professor at Harvard
Business School and holds a PhD from Stanford University. Lukasz
Pomorski is an Assistant Professor of Finance at the University of
Toronto's Rotman School of Management. He received a PhD in Finance and
an MBA from the University of Chicago, and his award-winning research
has been covered in The Financial Times, The Wall Street Journal and
The Washington Post.
About Hillsdale Investment Management
Founded in 1996, Hillsdale is an independent Canadian investment
boutique, providing a full range of traditional equity and alternative
investment strategies to both institutional and individual investors.
Hillsdale manages a spectrum of long only, long/short and custom
designed strategies employing a core investment style carefully
implemented using an adaptive multi-strategy, risk controlled process.
About Toronto CFA Society Toronto CFA Society is a not-for-profit organization supporting the
professional and business development of CFAcharterholders. The society provides members with a local perspective
on a global designation including: educational programs, sponsored
events, job postings, quarterly newsletters, a comprehensive affinity
program and networking opportunities.
The society celebrated its 75th anniversary in 2011 and is affiliated with CFA Institute, the global
body that administers the Chartered Financial Analyst curriculum and
sets voluntary, ethics-based performance-reporting standards for the
investment industry. With over 7,500 members, Toronto CFA Society is
the second largest of the 135 CFA societies operating in the world.
Our members are leaders in ethics within the financial community. For
more information, please refer to www.torontocfa.ca.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA
Note to editors: The authors will give a brief overview of their findings at this
afternoon's Awards Reception, at approximately 4:20 p.m. Today's event
is open to the media who can register on-site using a business card.
Interviews are available upon request by emailing email@example.com. The Awards Reception will be held from 4-6 p.m. at the BMO Client
Centre, 68th floor, First Canadian Place, Toronto.