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73-713: It was co-founded by fund manager and philanthropist Richard Driehaus and Dean of the University of Notre Dame School of Architecture Michael Lykoudis and was established in 2003 by the Richard H. Driehaus Charitable Lead Trust. It is presented annually through the School of Architecture at the University of Notre Dame in Indiana , United States, which teaches a classical approach to architecture. The jury also awards

146-583: A 14% increase in the previous year and was due both to the recovery in equity markets during the year and an inflow of new funds. As of 2011 the US remained by far the biggest source of funds, accounting for around a half of conventional assets under management or some $ 36 trillion. The UK was the second-largest centre in the world and by far the largest in Europe with around 8% of the global total. The 3-P's (Philosophy, Process, and People) are often used to describe

219-446: A constrained budget environment require a prioritization scheme. As a way of illustration, the recent development of renewable energy has seen the rise of effective asset managers involved in the management of solar systems (solar parks, rooftops, and windmills). These teams often collaborate with financial asset managers in order to offer turnkey solutions to investors. Infrastructure asset management became very important in most of

292-552: A personal and business perspective. Greater money management can be achieved by establishing budgets and analyzing costs and income etc. In stock and futures trading , money management plays an important role in every success of a trading system. This is closely related with trading expectancy: “Expectancy” which is the average amount you can expect to win or lose per dollar at risk. Mathematically: Expectancy = (Trading system Winning probability * Average Win) – (Trading system losing probability * Average Loss) So for example even if

365-514: A poor choice of benchmark. Meanwhile, it does not allow the separation of the performance of the market in which the portfolio is invested from that of the manager. The information ratio is a more general form of the Sharpe ratio in which the risk-free asset is replaced by a benchmark portfolio. This measure is relative, as it evaluates portfolio performance about a benchmark, making the result strongly dependent on this benchmark choice. Portfolio alpha

438-424: A reasonable price (GARP), market neutral , small capitalisation, indexed, etc. Each of these approaches has its distinctive features, adherents, and in any particular financial environment, distinctive risk characteristics. For example, there is evidence that growth styles (buying rapidly growing earnings) are especially effective when the companies able to generate such growth are scarce; conversely, when such growth

511-411: A specialist bachelor's degree , with title in "Investment Management" or in "Asset Management" or in "Financial Markets". Increasingly, those with aspirations to work as an investment manager, require further education beyond a bachelor's degree in business, finance, or economics. There is much discussion as to the various factors that can affect the performance of an investment manager, including

584-521: A structure of this sort is directly connected to local governance. Enterprise asset management (EAM) systems are asset information systems that support the management of an organization's assets. An EAM includes an asset registry (inventory of assets and their attributes) combined with a computerized maintenance management system (CMMS) and other modules (such as inventory or materials management). Assets that are geographically distributed, interconnected or networked, are often also represented through

657-428: A three-factor model to describe portfolio normal returns ( Fama–French three-factor model ). Carhart (1997) proposed adding momentum as a fourth factor to allow the short-term persistence of returns to be taken into account. Also of interest for performance measurement is Sharpe's (1992) style analysis model, in which factors are style indices. This model allows a custom benchmark for each portfolio to be developed, using

730-405: A trading system has 60% losing probability and only 40% winning of all trades, using money management a trader can set his average win substantially higher compared to his average loss in order to produce a profitable trading system. If he set his average win at around $ 400 per trade (this can be done using proper exit strategy) and managing/limiting the losses to around $ 100 per trade; the expectancy

803-506: A winning or losing trading system, such as %Loss probability > %Win probability). Asset management Asset management is a systematic approach to the governance and realization of all value for which a group or entity is responsible. It may apply both to tangible assets (physical objects such as complex process or manufacturing plants, infrastructure, buildings or equipment) and to intangible assets (such as intellectual property , goodwill or financial assets ). Asset management

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876-521: Is a Greek architect and author who practices architecture in London as principal of the firm Porphyrios Associates), and Elizabeth Plater-Zyberk (since 2017, founder of DPZ). In 2012, the then Charles, Prince of Wales (current King Charles III ) accepted The Richard H. Driehaus Prize at the University of Notre Dame Patronage Award during a ceremony Jan. 27 at St James's Palace in London. Driehaus,

949-653: Is a strategic technique to make money yield the highest interest-output value for any amount spent. Spending money to satisfy cravings (regardless of whether they can justifiably be included in a budget) is a natural human phenomenon. The idea of money management techniques has been developed to reduce the amount that individuals, firms, and institutions spend on items that add no significant value to their living standards, long-term portfolios, and assets. Warren Buffett , in one of his documentaries, admonished prospective investors to embrace his highly esteemed "frugality" ideology. This involves making every financial transaction worth

1022-422: Is a systematic process of developing, operating, maintaining, upgrading, and disposing of assets in the most cost-effective manner (including all costs, risks, and performance attributes). Theory of asset management primarily deals with the periodic matter of improving, maintaining or in other circumstances assuring the economic and capital value of an asset over time. The term is commonly used in engineering,

1095-682: Is a term synonymous with physical and infrastructure asset management, it is used to describe management of more complex physical assets which require the application of specialist asset management engineering methods over their life-cycles in order to maximize value for their owners, whilst keeping risk to an acceptable level. SAM is a sub-discipline of IT asset management . The International Organization for Standardization published its management system standard for asset management in 2014. The ISO 55000 series provides terminology, requirements, and guidance for implementing, maintaining and improving an effective asset management system. The key to forming

1168-415: Is around: Expectancy = (Trading system Winning probability * Average Win) – (Trading system losing probability * Average Loss) Expectancy = (0.4 x 400) - (0.6 x 100)=$ 160 - $ 60 = $ 100 net average profit per trade (of course commissions are not included in the computations). Therefore, the key to successful money management is maximizing every winning trades and minimizing losses (regardless whether you have

1241-467: Is because equities are riskier (more volatile) than bonds which are themselves riskier than cash. Against the background of the asset allocation, fund managers consider the degree of diversification that makes sense for a given client (given its risk preferences) and construct a list of planned holdings accordingly. The list will indicate what percentage of the fund should be invested in each particular stock or bond. The theory of portfolio diversification

1314-418: Is obtained by measuring the difference between the return of the portfolio and that of a benchmark portfolio. This measure appears to be the only reliable performance measure to evaluate active management. we have to distinguish between normal returns, provided by the fair reward for portfolio exposure to different risks, and obtained through passive management, from abnormal performance (or outperformance) due to

1387-422: Is often used to refer to the management of investment funds , most often specializing in private and public equity , real assets , alternative assets , and/or bonds. The more generic term asset management may refer to management of assets not necessarily primarily held for investment purposes. Most investment management clients can be classified as either institutional or retail/advisory , depending on if

1460-404: Is plentiful, then there is evidence that value styles tend to outperform the indices particularly successfully. Large asset managers are increasingly profiling their equity portfolio managers to trade their orders more effectively. While this strategy is less effective with small-cap trades, it has been effective for portfolios with large-cap companies. Fund performance is often thought to be

1533-437: Is that the investment manager prefers a closer, more open, and honest relationship with a company's management team than would exist if they exercised control; allowing them to make a better investment decision. The national context in which shareholder representation considerations are set is variable and important. The USA is a litigious society and shareholders use the law as a lever to pressure management teams. In Japan, it

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1606-557: Is the case when a large active manager sells his position in a company, leading to (possibly) a decline in the stock price, but more importantly a loss of confidence by the markets in the management of the company, thus precipitating changes in the management team. Some institutions have been more vocal and active in pursuing such matters; for instance, some firms believe that there are investment advantages to accumulating substantial minority shareholdings (i.e. 10% or more) and putting pressure on management to implement significant changes in

1679-555: Is the professional asset management of various securities , including shareholdings, bonds , and other assets , such as real estate , to meet specified investment goals for the benefit of investors . Investors may be institutions , such as insurance companies, pension funds, corporations, charities, educational establishments, or private investors, either directly via investment contracts/mandates or via collective investment schemes like mutual funds , exchange-traded funds , or Real estate investment trusts . Source: Venture

1752-422: Is to report the after-tax position of some standard taxpayer. Performance measurement should not be reduced to the evaluation of fund returns alone, but must also integrate other fund elements that would be of interest to investors, such as the measure of risk taken. Several other aspects are also part of performance measurement: evaluating if managers have succeeded in reaching their objective, i.e. if their return

1825-439: Is traditional for shareholders to be below in the 'pecking order', which often allows management and labor to ignore the rights of the ultimate owners. Whereas US firms generally cater to shareholders, Japanese businesses generally exhibit a stakeholder mentality, in which they seek consensus amongst all interested parties (against a background of strong unions and labor legislation ). Conventional assets under management of

1898-413: Is what investment management firms are paid for. Asset classes exhibit different market dynamics, and different interaction effects; thus, the allocation of money among asset classes will have a significant effect on the performance of the fund. Some research suggests that allocation among asset classes has more predictive power than the choice of individual holdings in determining portfolio return. Arguably,

1971-524: The American Academy in Rome ), Robert S. Davis (since 2009, developer and co-founder of Seaside, Florida ), Paul Goldberger (since 2006, former architecture critic for The New Yorker ), Léon Krier (since 2005, inaugural Driehaus Prize recipient), Witold Rybczynski (since 2011, architecture critic and professor of urbanism at the University of Pennsylvania ), Demetri Porphyrios (since 2013,

2044-454: The CAPM , allowing a better description of portfolio risks and a more accurate evaluation of a portfolio's performance. For example, Fama and French (1993) have highlighted two important factors that characterize a company's risk in addition to market risk. These factors are the book-to-market ratio and the company's size as measured by its market capitalization. Fama and French-, therefore proposed

2117-598: The Henry Hope Reed Award (given in conjunction with the Driehaus Prize) to an individual working outside the practice of architecture, who has supported the cultivation of the traditional city, its architecture and art through writing, planning or promotion. The 2020 Reed Award was given to Clem Labine, the creator of the Palladio Award , which recognizes excellence in traditional design, and

2190-803: The Asset Management Council (AMC), the World Partners in Asset Management (WPiAM), Society for Maintenance and Reliability Professionals (SMRP), the Institute of Asset Management (IAM), the International Society of Engineering Asset Management (ISEAM), and the Global Forum on Maintenance and Asset Management (GFMAM). Engineering asset management is a more recent term that is used to describe

2263-716: The Driehaus Prize and the Reed Award to a combined $ 250,000. The two prizes represent the most significant recognition for classicism in the contemporary built environment. Driehaus, the founder, chief investment officer and chairman of Driehaus Capital Management in Chicago, co-founded the award program in 2003 with Michael Lykoudis, who at the time was the Dean of the University of Notre Dame School of Architecture. Driehaus collaborated with Lykoudis, who organized and chaired

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2336-545: The US or BI-SAM in Europe) compile aggregate industry data, e.g., showing how funds in general performed against given performance indices and peer groups over various periods. In a typical case (let us say an equity fund ), the calculation would be made (as far as the client is concerned) every quarter and would show a percentage change compared with the prior quarter (e.g., +4.6% total return in US dollars). This figure would be compared with other similar funds managed within

2409-589: The United States and less so in Europe. However, as of 2019, the lines were becoming blurred. Money management is used in investment management and deals with the question of how much risk a decision maker should take in situations where uncertainty is present. More precisely what percentage or what part of the decision maker's wealth should be put into risk in order to maximize the decision maker's utility function . Money management can mean gaining greater control over outgoings and incomings, both in

2482-545: The United States, refers to both a firm that provides investment management services and to the individual who directs fund management decisions. The five largest asset managers are holding 22.7 percent of the externally held assets. Nevertheless, the market concentration, measured via the Herfindahl-Hirschmann Index , could be estimated at 173.4 in 2018, showing that the industry is not very concentrated. The business of investment has several facets,

2555-429: The acid test of fund management, and in the institutional context, accurate measurement is a necessity. For that purpose, institutions measure the performance of each fund (and usually for internal purposes components of each fund) under their management, and performance is also measured by external firms that specialize in performance measurement. The leading performance measurement firms (e.g. Russell Investment Group in

2628-416: The application of an asset management system, in accordance with the requirements of ISO 55001. The most frequent usage of the term portfolio manager (asset manager) refers to investment management , the sector of the financial services industry that manages investment funds and segregated client accounts . Asset management is part of a financial company that employs experts who manage money and handle

2701-655: The board includes expertly overseeing speculation portfolios for the benefit of clients to accomplish their monetary objectives. This incorporates key resource designation, developing broadened portfolios, and effectively observing execution while relieving gambles. Speculation administrators use exploration and examination to recognize valuable open doors and pursue informed choices, guaranteeing portfolios line up with client targets and hazard resilience. In addition, successful investment management requires adherence to ethical standards, compliance with regulations, and effective communication with clients. The term investment management

2774-469: The business world, and public infrastructure sectors to ensure a coordinated approach to the optimization of costs, risks, service/performance, and sustainability. The term has traditionally been used in the financial sector to describe people and companies who manage investments on behalf of others. Those include, for example, investment managers who manage the assets of a pension fund . The ISO 55000 series of standards, developed by ISO TC 251 , are

2847-467: The business. In some cases, institutions with minority holdings work together to force management change. Perhaps more frequent is the sustained pressure that large institutions bring to bear on management teams through persuasive discourse and PR. On the other hand, some of the largest investment managers—such as BlackRock and Vanguard —advocate simply owning every company, reducing the incentive to influence management teams. A reason for this last strategy

2920-514: The client is an institution or private individual/ family trust . Investment managers who specialize in advisory or discretionary management on behalf of (normally wealthy) private investors may often refer to their services as money management or portfolio management within the context of " private banking ". Wealth management by financial advisors takes a more holistic view of a client, with allocations to particular asset management strategies. The term fund manager, or investment adviser in

2993-472: The companies in which they hold shares (e.g., to hold managers to account, to ensure Board's effective functioning). Such action would add a pressure group to those (the regulators and the Board) overseeing management. However, there is the problem of how the institution should exercise this power. One way is for the institution to decide, the other is for the institution to poll its beneficiaries. Assuming that

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3066-441: The companies via the voting rights the shares carry and the consequent ability to pressure managements, and if necessary out-vote them at annual and other meetings. In practice, the ultimate owners of shares often do not exercise the power they collectively hold (because the owners are many, each with small holdings); financial institutions (as agents) sometimes do. Institutional shareholders should exercise more active influence over

3139-467: The constraints upon such licenses, e.g. a period. If, for example, one licenses software, often the license is for a given period. Adobe and Microsoft both offer time-based software licenses. In both the corporate and consumer worlds, there is a distinction between software ownership and the updating of software. One may own a version of the software, but not newer versions of the software. Cellular phones are often not updated by vendors, in an attempt to force

3212-458: The definition of enterprise asset management (EAM) by incorporating the management of all things of value to a municipal jurisdiction and its citizens' expectations. An example in which public asset management is used is land-use development and planning. Increasingly both consumers and organizations use assets, e.g. software, music, books, etc. where the user's rights are constrained by a license agreement. An asset management system would identify

3285-508: The developed countries in the 21st century, since their infrastructure network was almost completed in the 20th century and they have to manage to operate and maintain them cost-effectively. Physical, or Infrastructure Asset Management is a growing specialist engineering discipline, with many international technical societies now established to advance knowledge in this area, including the Engineers Australia technical society of

3358-616: The employment of professional fund managers, research (of individual assets and asset classes ), dealing, settlement, marketing, internal auditing , and the preparation of reports for clients. The largest financial fund managers are firms that exhibit all the complexity their size demands. Apart from the people who bring in the money (marketers) and the people who direct investment (the fund managers), there are compliance staff (to ensure accord with legislative and regulatory constraints), internal auditors of various kinds (to examine internal systems and controls), financial controllers (to account for

3431-507: The eponymous Clem Labine Award for creating more humane and beautiful environments. The Driehaus Prize is awarded to a living architect whose work embodies the principles of traditional and classical architecture and urbanism in contemporary society, and reflects what the jury considers positive cultural, environmental and artistic impacts. The award itself is a bronze miniature of the Choragic Monument of Lysicrates , known as

3504-800: The expense: 1. avoid any expense that appeals to vanity or snobbery 2. always go for the most cost-effective alternative (establishing small quality-variance benchmarks, if any) 3. favor expenditures on interest-bearing items over all others 4. establish the expected benefits of every desired expenditure using the canon of plus/minus/nil to the standard of living value system. These techniques are investment-boosting and portfolio-multiplying. There are certain companies as well that offer services, provide counseling and different models for managing money. These are designed to manage grace assets and make them grow. Wealth management , where financial advisors perform financial planning for clients, has traditionally served as an intermediary to investment managers in

3577-591: The first use of the Corinthian order on the outside of a building. The award includes a monetary prize of US$ 200,000. The award jury annually selects an architect who has greatly influenced the field of traditional and classical architecture. The jury travels together to a city of architectural significance, exploring it together, and taking the city's urban fabric as a backdrop for its deliberations. The jury has included notable architects and educators such as Adele Chatfield-Taylor (since 2004, President Emerita of

3650-405: The founder, chief investment officer and chairman of Driehaus Capital Management in Chicago, established the award program through Notre Dame in 2003 because of its reputation as a national leader in incorporating the ideals of traditional and classical architecture into the task of modern urban development. In 2007, Driehaus announced that he would increase the prize monies given out annually through

3723-479: The global fund management industry increased by 10% in 2010, to $ 79.3 trillion. Pension assets accounted for $ 29.9 trillion of the total, with $ 24.7 trillion invested in mutual funds and $ 24.6 trillion in insurance funds. Together with alternative assets (sovereign wealth funds, hedge funds, private equity funds, and exchange-traded funds) and funds of wealthy individuals, assets of the global fund management industry totalled around $ 117 trillion. Growth in 2010 followed

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3796-577: The heart of the investment management industry are the managers who invest and divest client investments. A certified company investment advisor should conduct an assessment of each client's individual needs and risk profile. The advisor then recommends appropriate investments. The different asset class definitions are widely debated, but four common divisions are cash and fixed income (such as certificates of deposit), stocks , bonds and real estate . The exercise of allocating funds among these assets (and among individual securities within each asset class)

3869-410: The influence of the business cycle. This can be difficult however and, industry-wide, there is a serious preoccupation with short-term numbers and the effect on the relationship with clients (and resultant business risks for the institutions). One effective solution to this problem is to include a minimum evaluation period in the investment management agreement, whereby the minimum evaluation period equals

3942-566: The institution (for purposes of monitoring internal controls), with performance data for peer group funds, and with relevant indices (where available) or tailor-made performance benchmarks where appropriate. The specialist performance measurement firms calculate quartile and decile data and close attention would be paid to the (percentile) ranking of any fund. It is probably appropriate for an investment firm to persuade its clients to assess performance over longer periods (e.g., 3 to 5 years) to smooth out very short-term fluctuations in performance and

4015-414: The institution polls, should it then: (i) Vote the entire holding as directed by the majority of votes cast? (ii) Split the vote (where this is allowed) according to the proportions of the vote? (iii) Or respect the abstainers and only vote the respondents' holdings? The price signals generated by large active managers holding or not holding the stock may contribute to management change. For example, this

4088-413: The institutions' own money and costs), computer experts, and "back office" employees (to track and record transactions and fund valuations for up to thousands of clients per institution). Key problems include: Institutions often control huge shareholdings. In most cases, they are acting as fiduciary agents rather than principals (direct owners). The owners of shares theoretically have great power to alter

4161-429: The international standards for Asset Management. ISO 55000 provides an introduction and requirements specification for a management system for asset management. The ISO 55000 standard defines an asset as an "item, thing or entity that has potential or actual value to an organization". ISO 55001 specifies requirements for an asset management system within the context of the organization, and ISO 55002 gives guidelines for

4234-485: The investment manager's investment horizon. An enduring problem is whether to measure before-tax or after-tax performance. After-tax measurement represents the benefit to the investor, but investors' tax positions may vary. Before-tax measurement can be misleading, especially in regimens that tax realised capital gains (and not unrealised). It is thus possible that successful active managers (measured before tax) may produce miserable after-tax results. One possible solution

4307-563: The investments of clients. This is done either actively or passively. Physical and Infrastructure asset management is the combination of management, financial, economic, engineering, and other practices applied to physical assets to provide the best value level of service for the costs involved. It includes the management of the entire life cycle—including design, construction, commissioning, operating, maintaining, repairing, modifying, replacing, and decommissioning/disposal—of physical and infrastructure assets. Operation and maintenance of assets in

4380-403: The jury, to recognize those practitioners and scholars who made seminal contributions to modern traditional architecture and urbanism. Dreihaus chose to work with the University of Notre Dame because of its reputation as a national leader in incorporating the ideals of traditional and classical architecture into the task of modern urban development. In 2007, Driehaus announced that he would increase

4453-454: The linear combination of style indices that best replicate portfolio style allocation, and leads to an accurate evaluation of portfolio alpha. However, certain research indicates that internet data may not necessarily enhance the precision of predictive models. At the undergraduate level, several business schools and universities internationally offer "Investments" as a subject within their degree; further, some universities, in fact, confer

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4526-642: The management of complex physical assets, a specific engineering practice that is concerned with optimizing assets, in the context of the organizations goals and objectives, through using multidiscipline engineering methodologies, and Terotechnology (which includes management, engineering, and financial expertise), to balance cost, risk, and performance. Engineering asset management includes multiple engineering disciplines, including but not limited to maintenance engineering , systems engineering , reliability engineering , process safety management , industrial engineering , and risk analysis . Engineering asset management

4599-548: The manager's qualifications. Some conclude that there is no evidence that any particular qualification enhances the manager's ability to select investments that result in above-average returns. But see also Chartered Financial Analyst § Efficacy of the CFA program re related research. Money management is the process of expense tracking, investing, budgeting, banking and evaluating taxes of one's money, which includes investment management and wealth management . Money management

4672-413: The manager's skill (or luck), whether through market timing , stock picking , or good fortune. The first component is related to allocation and style investment choices, which may not be under the sole control of the manager, and depends on the economic context, while the second component is an evaluation of the success of the manager's decisions. Only the latter, measured by alpha, allows the evaluation of

4745-515: The manager's true performance (but then, only if you assume that any outperformance is due to the skill and not luck). Portfolio returns may be evaluated using factor models. The first model, proposed by Jensen (1968), relies on the CAPM and explains portfolio returns with the market index as the only factor. It quickly becomes clear, however, that one factor is not enough to explain the returns very well and that other factors have to be considered. Multi-factor models were developed as an alternative to

4818-486: The notion of rewarding risk and produced the first performance indicators, be they risk-adjusted ratios ( Sharpe ratio , information ratio) or differential returns compared to benchmarks (alphas). The Sharpe ratio is the simplest and best-known performance measure. It measures the return of a portfolio over above the risk-free rate, compared to the total risk of the portfolio. This measure is said to be absolute, as it does not refer to any benchmark, avoiding drawbacks related to

4891-413: The prize monies given out annually through the Driehaus Prize and the Reed Award to a combined $ 250,000. The two prizes represent the most significant recognition for classicism in the contemporary built environment. The following architects have been awarded the Driehaus Prize since 2003: Investment management Investment management (sometimes referred to more generally as asset management )

4964-471: The reasons why the manager can produce above-average results. Ethical or religious principles may be used to determine or guide the way in which money is invested. Christians tend to follow the Biblical scripture . Several religions follow Mosaic law which proscribed the charging of interest . The Quakers forbade involvement in the slave trade and so started the concept of ethical investment . At

5037-639: The skill of a successful investment manager resides in constructing the asset allocation, and separating individual holdings, to outperform certain benchmarks (e.g., the peer group of competing funds, bonds, and stock indices). It is important to look at the evidence on the long-term returns to different assets, and to holding period returns (the returns that accrue on average over different lengths of investment). For example, over very long holding periods (e.g. 10+ years) in most countries, equities have generated higher returns than bonds, and bonds have generated higher returns than cash. According to financial theory, this

5110-653: The typical physical assets or infrastructure assets, the soft assets might include permits, licenses, brands, patents, right-of-ways, and other entitlements or valued items. The EAM system is only one of the 'enablers' of good asset management. Asset managers need to make informed decisions to fulfill their organizational goals, this requires good asset information but also leadership, clarity of strategic priorities, competencies, inter-departmental collaboration and communications, workforce, and supply chain engagement, risk and change management systems, performance monitoring, and continual improvement. Public asset management expands

5183-403: The use of geographic information systems (GIS) . GIS-centric asset registry standardizes data and improves interoperability, providing users the capability to reuse, coordinate, and share information efficiently and effectively. A GIS platform combined with information of both the "hard" and "soft" assets helps to remove the traditional silos of departmental functions. While the hard assets are

5256-413: Was originated by Markowitz (and many others). Effective diversification requires management of the correlation between the asset returns and the liability returns, issues internal to the portfolio (individual holdings volatility), and cross-correlations between the returns. There is a range of different styles of fund management that the institution can implement. For example, growth , value, growth at

5329-527: Was sufficiently high to reward the risks taken; how they compare to their peers; and finally, whether the portfolio management results were due to luck or the manager's skill. The need to answer all these questions has led to the development of more sophisticated performance measures, many of which originate in modern portfolio theory . Modern portfolio theory established the quantitative link that exists between portfolio risk and returns. The capital asset pricing model (CAPM) developed by Sharpe (1964) highlighted

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