Klaas P. Baks PhD is a recognized thought-leader in alternative investments and entrepreneurial finance. Dr. Baks is the co-founder and executive director of the Emory Center for Alternative Investments, whose international board consists of chief executive officers of pension and sovereign wealth funds with over $1 trillion in assets under management. Dr. Baks has been an Associate Finance Professor at Emory University’s Goizueta Business School since 2002.
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 teaches courses in private equity, venture capital and entrepreneurial finance at Emory and has been recognized by students and alumni with four teaching awards, including Emory University's highest award for teaching excellence, the Emory Williams Distinguished Teaching Award, and the Marc F. Adler Prize for Teaching Excellence awarded by alumni.
Dr. Baks serves as director or advisor for over 13 companies in a variety of industries, including Brightwood Capital Advisors (fixed income), Kruger Capital (private equity), Panton Equity Partners (private equity), Peachtree Hotel Group (real estate), Transcardiac Therapeutics (health care), Triton Value Partners (strategic consulting) and TWO Capital Partners (real estate). He is also a member of the Board of Directors of the Michael C. Carlos Museum.
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 on the performance of actively managed mutual funds.
Born and raised in the Netherlands, Dr. Baks resides with his wife and son in Atlanta, Georgia.
Areas of Expertise (5)
The Wharton School, University of Pennsylvania: PhD, Finance 2002
Brown University: MA, Economics 1997
Groningen University: MSc, Econometrics & Statistics 1995
Media Appearances (3)
Bill Gross and the dying breed of mutual fund superstars
Investment News online
"Celebrity sells. And it can sell mutual funds as well as it sells sneakers.”
Professor Baks is featured in this article by Investment News.
Do Alternative Investments Belong in Most Individuals' Portfolios?
The Wall Street Journal online
Professor Baks is featured in this article by The Wall Street Journal.
When 'Focused' Funds Falter
The Wall Street Journal online
"Scan the list of the worst-performing mutual funds of 2011, and you will run across a slew of formerly highflying fund managers whose picks have crashed and burned.”
Professor Baks is featured in this article for the Wall Street Journal.
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.
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.
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.