Biography
Klaas P. Baks PhD is a recognized thought-leader in the alternative investments industry. The combination of cutting-edge academic insights and leading industry practices forms the foundation of his investment ideas and research. An award-winning professor and a frequent speaker on topics related to alternative investments, investing and entrepreneurship, he is known for a unique ability to combine original and useful business content with an engaging and dynamic speaking style.
Dr. Baks is the Executive Director and Co-Founder of the Emory Center for Alternative Investments and a Professor in the Practice of Finance at Emory University’s Goizueta Business School. The Emory Center for Alternative Investments is a global leader in the alternative investments industry.
Dr. Baks's research and teaching focuses on issues in alternative investments, entrepreneurial finance and investment management, and he has published papers in numerous academic and business journals, including the Wall Street Journal. He has been recognized by students and alumni with nine awards, including the Marc F. Adler Prize for Teaching Excellence awarded by alumni, the Donald R. Keough Award for Excellence, and the university's highest award for teaching excellence, the Emory Williams Distinguished Teaching Award.
Dr. Baks serves as director or advisor for over 13 companies and investment funds with over $1.5 billion in assets under management, including American Virtual Cloud Technologies (NASDAQ: AVCT), Vistas Media Acquisition Company (NASDAQ: VMAC), Buckhead One Financial (an affiliate of Angel Oak Capital), Peachtree Hotel Group and TWO Capital Partners. An active member of the Atlanta community, Dr. Baks serves on the board of the Michael C. Carlos Museum and is a former member of the Investment Committee of the Westminster Schools Board of Trustees.
Prior to joining Emory University, Dr. Baks held positions at Fuji Bank in Tokyo, Japan, Deutsche Bank in Hong Kong and the International Monetary Fund in Washington DC.
Dr. Baks studied at the Wharton School at the University of Pennsylvania (PhD in Finance), Brown University (Master's in Economics), Groningen University (Master's in Econometrics, cum laude) and Leiden University (Diploma in Japanese Language and Business Studies). He spent two years at Harvard University as part of his doctoral research at Wharton.
Born and raised in the Netherlands, Dr. Baks resides with his wife and son in Atlanta, Georgia.
Education
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PhD in FinanceThe Wharton School, University of Pennsylvania
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MA in EconomicsBrown University
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MSc in Econometrics & StatisticsGroningen University
Should Investors Avoid All Actively Managed Mutual Funds? A Study in Bayesian Performance Evaluation
This paper analyzes mutual-fund performance from an investor’s perspective. We study the portfolio-choice problem for a mean-variance investor choosing among a risk-free asset, index funds, and actively managed mutual funds. To solve this problem, we employ a Bayesian method of performance evaluation; a key innova- tion in our approach is the development of a flexible set of prior beliefs about managerial skill. We then apply our methodology to a sample of 1,437 mutual funds. We find that some extremely skeptical prior beliefs nevertheless lead to economically significant allocations to active managers.
The importance of analysts vs. brokers in the performance of stock recommendations
We analyze who plays a more important role in the success of a stock recommendation: the analyst or the brokerage firm that employs the analyst. Using a Bayesian methodology that models abnormal performance as the output of a Cobb-Douglas production function with analyst and broker inputs, we find evidence that the brokerage firm drives the announcement effect while the skill of the analyst ultimately determines the long-run success of a recommendation. Top-performing analysts who switch brokerage firms are likely to maintain their strong track records. Similarly, analysts who perform poorly continue to do so regardless of their employers. Our results hold over the sub-sample periods that surround the sell-side analyst reforms of 2002.
Fund managers who take big bets: Skilled or overconfident
We document a positive relation between mutual fund performance and managers' willingness to take big bets in a relatively small number of stocks. Focused managers outperform their more broadly diversified counterparts by approximately 30 basis points per month, or roughly 4% annualized. The results hold for mimicking portfolios based on fund holdings as well as when returns are measured net of expenses. Concentrated managers outperform precisely because their big bets outperform the top holdings of more diversified funds. The evidence suggests that investors may enhance performance by diversifying across focused managers rather than by investing in highly diversified funds.