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The Commonfund Prize

Since 1996, the Commonfund Institute has awarded a cash prize for original research on endowment and foundation management. The prize is currently administered by the European Finance Association.

2013 Winner Announced:

Thomas Gilbert, University of Washington - Department of Finance and Business Economics and Christopher M. Hrdlicka, University of Washington - Michael G. Foster School of Business for "Why do University Endowments Invest so Much Risky Assets?"  (2013)

Maintaining a large endowment invested in risky securities requires a university to forego expansion through internal projects. We capture this trade-off by defining a university objective function that balances the demands of altruistic stakeholders to expand against those of self-interested stakeholders to maximize their lifetime payments. We show that a risky and large endowment signals a combination of three university characteristics: low productivity marginal internal projects; self-interested stakeholders resisting productive expansion; or binding constraints on maximum endowment payouts. Our model demonstrates that endowments offer a window into university fundamentals, and it helps explain the empirical heterogeneity in asset allocations and sizes..


Past winners have included:

Adair Morse, Booth School of Business, The University of Chicago, for "Activist Investors and Performance in Venture Capital and Private Equity Funds" (2012)

Bart Diris, Erasmus University Rotterdam, for "Model Uncertainty for Long-term Investors" (2011)

Stephen G. Dimmock, Nanyang Technological, and William Gerken, Auburn University, for “Finding Bernie Madoff: Detecting Fraud by Investment Managers” (2010) 

Martijn Cremers, Yale School of Management, Antti Petajisto, Yale School of Management, and Eric Zitzewitz, Dartmouth College, for "Should Benchmark Indices Have Alpha? Revisiting Performance Evaluation" (2009)

Stephen G. Dimmock, Michigan State University,  for "Portfolio Choice, Background Risk, and University Endowment Funds" (2008)

"Investing in Hedge Funds when Returns are Predictable"(2007)

Harrison Hong, Princeton University and Marcin Kacperczyk, University of British Columbia, for “The Price of Sin: The Effects of Social Norms on Markets” (2006)

"Performance of Private Equity Funds" (2005)"

Robert J. Shiller, Yale University, for Irrational Exuberance (2000)

Philip H. Dybvig, Washington University, for research on asset allocation and spending rules for educational endowments (1996)


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