Pohjola Pankki Oyj : OP-Pohjola Group Research Foundation Doctoral
Dissertation Award to a hedge fund researcher
Petri Jylhä's, D.Sc. (Econ. & Bus. Adm.), doctoral dissertation "Essays on the
Economics of Hedge Funds" at the Aalto University School of Business has been
awarded the first prize in the OP-Pohjola Group Research Foundation Doctoral
Thesis competition. The award is worth 10,000 euros.
The doctoral dissertation consists of four essays that examine hedge funds
from various perspectives. Hedge funds refer to funds which often involve high
risks and seek to increase their returns in all market conditions.
The first essay investigates hedge fund operations in international financial
markets. Based on the results, funds generally engage in traditional interest
rate differential trading, which involves borrowing funds in low-interest
currencies and investing in high-interest currencies.
The funds may grow so large that their trades in currency markets affect
exchange rates and interest rates. Such was the case in autumn 2008 when
capital drain from hedge funds strengthened the Japanese yen and weakened many
The second essay demonstrates that hedge funds provide liquidity on the stock
market. The results show that funds buy stocks that other investors want to
sell and sell stocks that others want to buy. Thus, hedge funds improve market
liquidity and reduce fluctuations in share prices.
The third essay shows that capital flows have a significant impact on hedge
fund yields. When investors invest capital in funds, the existing investments
grow, which in turn increases the value of the investments in the fund.
The fourth essay examines hedge fund return reporting. According to the
results, some hedge funds misreport their return figures at times in order to
advance their own cause. Misreporting can artificially increase the size of a
fund and allow for invoicing of higher commissions or, for example, revise
return history to make it more attractive for new investors.
The award-winning doctoral dissertation was approved in the academic year
2011-12 and was rated as a high-grade study by its examiners. The Board of
OP-Pohjola Group Research Foundation selected the winner.
For more information, please contact:
Maarit Lindström, Representative of OP-Pohjola Group Research Foundation, tel.
+358 (0)40 531 8262
OP-Pohjola Group is Finland's leading financial services group providing a
unique range of banking, investment and insurance services.The Group's mission
is to promote the sustainable prosperity, well-being and security of its
owner-members, customers and operating regions through its local presence.Its
objective is to offer the best and most versatile package of loyal customer
benefits on the market.OP-Pohjola Group consists of some 200 member
cooperative banks and the Group's central institution, OP-Pohjola Group
Central Cooperative, with its subsidiaries and closely-related companies, the
largest of which is the listed company Pohjola Bank plc.
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Source: Pohjola Pankki Oyj via Thomson Reuters ONE
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