Winners of the 5th Postbank Finance Award now certain
Deutsche Postbank today awarded three student teams from Bonn, Cologne and Regensburg the Postbank Finance Award 2008. The Bank aims to use the prize to encourage students in all subject areas to get involved in current issues in public finance. 80% of the prize money will go toward equipping the winning higher educational institutions. At €70,000, it is the highest German higher education award and has already been awarded five times.
Over the last eight months, a total of 48 teams from 40 universities and professional schools in Germany and Austria took on the Postbank’s challenge to analyze the “opportunities and risks of hedge funds”. Their work has contributed to the objectification of the controversial discussion about hedge funds. “The commitment of the participants showed us that practical financial topics can be so interesting that students are willing to work for many months on them on top of their own studies”, said Dr. Wolfgand Klein, Chairman of the Board of Management of Deutsche Postbank AG and patron of the competition involved in the award. “The students have demonstrated that they want to make a difference and that we can also learn something from them and their creativity.”
From left to right: Moritz Weigand, Jasmin Gider, Daniel Bembennek, Leonie Gerhards, Timo Schilz, Dr. André Betzer with Ralf Stemmer and Dr. Wolfgang Klein
The Winners and Their Ideas
First prize of €40,000 went to Daniel Bembennek, Leonie Gerhards, Jasmin Gider, Timo Schilz and Moritz Weigand from the University of Bonn. The team was supported by Assistant Professor Dr. André Betzer. Under the heading “Hedge Fund Activism in Germany”, the students considered the criteria which hedge funds use to decide when to participate in companies whose performance they want to actively influence (activist hedge funds) and whether this involvement actually increases yield. They reached the conclusion that activist hedge funds prefer to participate in companies in which there are manager-owner conflicts and that they are successful in generating excess returns. What the jury found impressive about this piece of research was that the students pioneered a comprehensive data record and that their work offers new insights in the effects of activist hedge funds in Germany.
Second place of €20,000 went to Christian Maschner, Andreas Metzen, Jonas Nahry and Erik Yankulin from the University of Cologne. With the support of Professor Alexander Kempf, they examined whether the yield-risk profile of an investor portfolio can be improved with the addition of hedge funds. The work, underpinned by empirical evidence, reached the conclusion for the period 1998 to 2007 that the addition of hedge funds significantly improved the yield-risk profile. It also illustrated that the results in both bull and bear markets are relatively stable.
Third prize of €10,000 went to Johannes Gerer, Eva-Maria Ferstl, Christopher Priberny and Manuel Seitz of the University of Regensburg. Together with Professor Gregor Dorfleitner they investigated in which circumstances hedge fund certificates can improve the risk-yield ratio of an investor portfolio of shares and fixed income securities for private investors. They also developed their own computer program for this purpose.
The winners were selected by a jury of seven from the spheres of economy, science and the media. The Chairman was Professor Günter Franke of the University of Konstanz.
The Competition
The Postbank Finance Award has been awarded annually since 2003. The aim is to promote research into innovative and scientifically sound solutions to current public finance issues under the motto “Understanding the Future – Shaping the Future”. With its award, Postbank also aims to offer participating students stimulus and help in further study and career planning.
