How should investors’ long-term returns be measured?

Traditional metrics like alpha and compound returns often fall short in capturing the true economic value of long-horizon investments. This event challenges conventional thinking and introduces the concept of the “sustainable return”—the rate of periodic withdrawal that maintains real capital over time, offering a more meaningful measure for institutional investors.

Join Hendrik (Hank) Bessembinder, Professor of Finance, Arizona State University as he explores innovative approaches to performance measurement that align with the evolving priorities of endowments, pension funds, and impact-driven portfolios.

Learning objectives

• Understand the limitations of arithmetic means (such as alpha) as well as compound returns as measures of investor outcomes.

• Gain appreciation for the role of internal rates of return (IRRs) in investment management. 

• Learn about the sustainable returns, and its applicability for endowments, pension funds, etc. 

Timings

Registration: 16:55
Event: 17:00 - 18:00 

Speaker 
Hendrik (Hank) Bessembinder, Professor of Finance

Hendrik (Hank) Bessembinder is Professor of Finance and Labriola Chair at Arizona State University’s W.P. Carey School of Business. A leading expert in financial markets, his research spans trading costs, investment strategies, and long-term returns, with publications in top finance journals. 

Hank has advised institutions including the NYSE, SEC, DOJ, and Goldman Sachs, and serves as Managing Editor of the Journal of Financial and Quantitative Analysis, Associate Editor of the Journal of Financial Markets and the Financial Analysts Journal, and is past Associate Editor of the Journal of Financial Economics and the Journal of Finance.