Mendoza School of Business

ND finance professor wins award for emerging markets investing research

Published: January 16, 2014 / Author: Carol Elliott


K.J. Martijn 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, “Emerging 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 parent companies.

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 Cremers.

“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 for more information.