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Oxera Partner Professor Tim Jenkinson awarded two prestigious prizes for papers published in the field of corporate finance.

The Brattle Group Distinguished Paper prize is awarded annually by the American Finance Association to recognise the top papers published in the area of corporate finance in the Journal of Finance. The Distinguished Paper prize 2014 has been awarded to Professor Jenkinson for his paper ‘Borrow Cheap, Buy High? The Determinants of Leverage and Pricing in Buyout’. The paper, co-authored with Ulf Axelson, Per Strömberg and Michael S. Weisbach, examined capital structure theories in the context of buyouts. The authors found that buyout leverage is unrelated to factors that drive public firm leverage. Instead, variation in economy-wide credit conditions is the main driver of leverage and pricing in buyouts, while having little impact on public firms. Higher deal leverage is associated with lower buyout fund returns, suggesting that acquirers overpay when access to credit is easier.

Professor Jenkinson has also received the 2015 Commonfund Prize for his paper ‘Picking Winners? Investment Consultants’ Recommendations of Fund Managers’. In this paper Professor Jenkinson and co-authors Howard Jones and Jose Martinez analysed the factors that drive investment consultants’ recommendations, what impact these recommendations have on flows, and how well the recommended funds perform. Focusing on US actively managed equity funds the authors found that investment consultants’ recommendations of funds are driven largely by soft factors, rather than the funds’ past performance, and that their recommendations have a very significant effect on fund flows. However, no evidence was found that these recommendations add value, suggesting that the search for winners, encouraged and guided by investment consultants, is fruitless. The Commonfund Prize is awarded annually for original research relevant to endowment and foundation asset management, and is currently administered by the Newton Centre for Endowment Asset Management at the Cambridge Judge Business School.

These awards recognise Professor Jenkinson’s outstanding contribution to research in the field of corporate finance.