AQR offers $100,000 for best finance ideas

Quant hedge fund managers AQR Capital Management have launched a $100,000 annual competition to recognise applied academic papers in finance that have the most significant practical implications for investors.

The AQR Insight Award seeks entrants with unpublished papers that study investment in liquid assets for both tax-exempt institutional and taxable investor portfolios.

Areas of focus include asset allocation, security selection, portfolio implementation, and risk management.

David Kabiller (pictured), founding partner of AQR and its head of client strategies, says it is important that leading thinkers in analytical finance and economics focus on developing methods to enhance investment performance.

“The AQR Insight Award has been launched in recognition of the need to promote academic research that illuminates the drivers of successful investing and that can be applied to real-world portfolios,” Kabiller says.

Academic experts and investment managers will judge the papers, with AQR saying that the papers will be assessed according to their “novelty and acuity of their insights, and the potential value of those insights deployed within an investor’s portfolio”.

The $100,000 award may be divided among one to three competing entries, depending on the quality of the submissions each year.

Initial entries are due in January 2012.

Up to five finalists will gain the opportunity to present their papers to a panel of judges, consisting of senior members of AQR’s portfolio management team.

The AQR Insight Award Committee consists of 13 members, with most having doctorates in analytic finance.

“AQR is eager to engage these researchers,” Kabiller says.

“Based on our experience in helping ideas germinate into actual strategies, we do expect the process to stimulate our own innovation – but our goal here is to recognise the acorns of good research.”

AQR has more than $40 billion under management in a range of strategies from high-volatility, market-neutral hedge funds to low-volatility, benchmark-driven traditional portfolios. The fund also provides exposures to other alternative assets through mutual funds.

In other award news, fund accounting and service provider Dealis Fund Operations recently won the SimCorp StrategyLab Growth Management Excellence Award 2011.

The award recognises Dealis for its excellence in driving efficiency improvements in back office operations.

Dealis spokesperson Roman Trageiser says market volatility has sharpened the focus of investment managers to concentrate on their core business and outsource other areas of their business.

“Our growth strategy is, among other things, based on thorough market and competitive analyses,” Trageiser says.

“We find that because of greater market volatility, investment managers increasingly focus on their core competences and seek to outsource what they regard as non-core activities.”

Dealis administers approximately 2500 mutual and special funds representing 340 billion euros ($470.5 billion) and is a joint venture company set up by Allianz Global Investors and DekaBank. Dealis is the largest provider of fund accounting and fund administration services in Germany.

Dealis Fund Operations was judged the winner by a jury consisting of director of SimCorp StrategyLab, Professor Ingo Walter, Professor Stephen Brown of New York University, Professor Paul Verdin of the University of Leuven and SimCorp’s CEO, Peter L. Ravn.

The award acknowledges best practice within risk, cost and growth management in the global investment management industry.