The University of Chicago News Office
Nov. 28, 2006 Press Contact: Steve Koppes
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Asset manager Steve G. Stevanovich donates $7 million to Center for Financial Mathematics at University of Chicago

The University of Chicago’s Center for Financial Mathematics, the only research center in the nation, if not the world, devoted to financial mathematics has received a $7 million gift from Steve G. Stevanovich, founder of an asset management firm with offices in North America, Europe and Asia.      

The research center, founded in August 2006 at the University of Chicago, has been named the Stevanovich Center for Financial Mathematics. A spin-off of the University’s master’s degree program in financial mathematics, the Center will bring together scholars and finance professionals to address problems faced by the industry.

“World financial markets are becoming more and more complex and mathematics is increasingly becoming an invaluable and necessary tool in understanding these markets,” Stevanovich said. “The financial mathematics program at the University of Chicago is at the forefront of providing students the necessary tools to filter and decode this complexity. It is an honor for me to be a part of this endeavor and to continue the legacy of excellence at the University of Chicago.”

Raised in Chicago, Stevanovich received his bachelor’s degree in economics from the University of Chicago in 1985 and his MBA from Chicago’s Graduate School of Business in 1990.

“This generous gift from one of the University’s alumni will greatly enhance our ability to achieve our goals in research and teaching in quantitative finance,” said Robert Fefferman, Dean of the Physical Sciences Division and the Max Mason Distinguished Service Professor in Mathematics at the University of Chicago. “The Stevanovich Center will be devoted to research, but certainly the increased contact between financial practitioners and our faculty members will sharpen the focus of our classroom instruction.”

Part of the Stevanovich gift will be used to renovate the Mathematics/Statistics Building, a three-story red brick structure at 5727 S. University Ave., as the home of the new Stevanovich Center and for the University’s financial mathematics program.

In coming years, the Stevanovich Center will offer a regular schedule of conferences and workshops for academicians and industry professionals, said Niels Nygaard, Professor in Mathematics and founding director of both the Stevanovich Center and the financial mathematics program.

The Center also plans to launch a trans-Atlantic collaboration with French universities that have special expertise in applied mathematics. Nygaard is working with Henri Berestycki, a regular visiting scholar from the Ecole des Hautes Etudes en Sciences Sociales (School for Advanced Studies in the Social Sciences) in Paris, to organize an annual financial mathematics conference with a French university. The University of Chicago’s Paris Center would serve as the French venue.

The master’s in financial mathematics program was founded 10 years ago under the leadership of Robert Zimmer, now President of the University, and Fefferman when they successively served as Chairman of the Mathematics Department in the 1990s.

Approximately 100 students are currently enrolled in the one-year program, which leads to a Master of Science degree in financial mathematics. The program’s faculty is comprised of professors from the departments of Mathematics, Statistics and Economics and leading professionals in the financial industry.

The Stevanovich Center will provide students new research-based insights that equip them with the latest tools for successful careers in asset management, Nygaard said. Scholars and practitioners at the center will grapple with risk-management issues that pertain to the trade of stocks, bonds, commodities and other financial products. Hedge funds alone comprise a growing industry that tops $1 trillion annually, according to the Hedge Fund Association.

Many hedge funds attempt to guard against downturns in their trading markets by employing options, futures, and other strategies, but sometimes they fail. Nygaard said the University’s financial mathematics faculty carefully examines the causes of hedge fund failures. Usually they find that the hedge fund managers have overlooked important elements of risk. “We try to teach people to avoid those pitfalls,” he said.      

“You have to look at everything. It’s a very dangerous world out there,” Nygaard said. Even low-probability events must be taken into account. “There are so many hedge funds that some of them are going to be hit by extremely unlikely events. You better be prepared for what you are going to do if it does happen.”      

Companies interested in sponsoring Stevanovich Center activities may contact Richard Jones, Director of Corporate Relations, at 773-834-7616.

 

http://www-news.uchicago.edu/releases/06/061128.math.shtml
Last modified at 11:20 AM CST on Tuesday, November 28, 2006.

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