Schulich academic wins award for paper on hedge fund regulation

Date: Friday, December 19, 2008
Author: Megan Harman, Investment Executive

Award meant to encourage applied research in the field of alternative investments in Canada.

A research paper on the impact of hedge fund regulation on fund performance has won an alternative investment industry research award established by the Alternative Investment Management Association Canada Inc. and Hillsdale Investment Management Inc.

The 2008 AIMA Canada - Hillsdale Research Award was awarded to Douglas Cumming, associate professor and Ontario research chair at York University’s Schulich School of Business.

Cumming’s winning paper, entitled “Hedge Fund Regulation and Performance,” finds that regulations which restrict the location of key service providers and marketing channels that permit wrappers tend to be associated with worse performance and a reduction in risk of hedge funds. The paper also finds that the reduction in risk is not sufficient to compensate for the lowering of performance.

“The paper submitted by Prof. Cumming is extremely relevant to the current business environment,” said Hillsdale president and CEO Chris Guthrie. “It has done much to raise the level of knowledge and the quality of discussion on alternative investments.”

Cumming wins a cash prize of $10,000, and a condensed version of the paper will be published in the December 2008 issue of Canadian Investment Review. The full paper will also be available on both the AIMA Canada and Hillsdale Web sites.

The award is meant to encourage and recognize high quality applied research in the field of alternative investments in Canada and features submissions from academics, students and practitioners in Canada. Eligible papers focus on any aspect of alternative investments, such as investment strategy, regulation, trading, risk management and risk measurement.

The winning submission was determined by an independent adjudication panel of academic faculty from business schools across Canada, which was chaired by Paul Bates, dean of the DeGroote School of Business at McMaster University.

The award was initially established in 2004 by AIMA Canada. This month, independent investment company Hillsdale Investment Management entered a three-year partnership to present the award with AIMA.

“The alternative investment industry has become an integral part of finance in Canada and the world,” said Guthrie. “It is Hillsdale’s objective to demonstrate its commitment to applied research and to raise the level of quality of public discussion on alternative investments.”