Ricardo Research has been formed to apply the ideas developed by the Paul Woolley Centre for the Study of Capital Market Dysfunctionality to the world of institutional investing. Building on the body of theory emerging from the Centre, Ricardo Research aims to transform the way that investors think about financial markets, with the ultimate goal of fostering a more socially useful financial system.

The Paul Woolley Centre was founded at the London School of Economics in 2007 under the direction of Professor Dimitri Vayanos. Its objective is to produce and disseminate high-quality research focused on the workings of capital markets and the social efficiency of allocations achieved in these markets. The Centre is supported by a team of finance professors, faculty members and doctoral students.

Over the last decade, research undertaken at the Centre has led to the development of a set of theories which explain asset mispricing and its adverse consequences for the savings and investment process and the broader economy. The policy implications of these theories are profound and extensive, especially for the management of asset portfolios.

Ricardo Research will work closely with the Paul Woolley Centre to translate their research findings into practical advice. In the spirit of the 19th century economist and investor David Ricardo, we seek to apply bold new academic insights to the stark challenges confronting large institutional investors.

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of our latest blogs

Misdiagnosing the crisis of capitalism

Much of the commentary on the crisis of capitalism ignores the role of institutional investors in creating the conditions in which corporate short-termism can thrive. We argue that a greater focus on long-run value creation in the capital markets – instigated by long-horizon asset owners – could help restore trust in the financial system and deliver meaningful benefits to society.

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Looking less at the scoreboard

Traditional performance monitoring reports do more harm than good. They encourage an excessive focus on performance data and contribute to procyclicality in decision-making by asset owners and managers. Minor tweaks to the existing approach are unlikely to achieve very much. Instead, a more fundamental re-think is required.

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