MIT Sloan Prof. Robert C. Merton named S. Donald Sussman Fellow

CAMBRIDGE, Mass., July 25, 2016––The MIT Sloan School of Management recently announced that Robert C. Merton, a Nobel laureate in Economics and the School of Management Distinguished Professor of Finance, was named the recipient of the S. Donald Sussman Fellowship. The Fellowship is awarded to individuals or groups who best exemplify S. Donald Sussman’s career as a successful investor in quantitative investment strategies and models. Merton was selected for his wide-ranging contributions to modern financial economics, from his earlier work in modeling derivative securities to his more recent research on achieving financial security in retirement.

MIT Sloan Dean David Schmittlein says, “We congratulate Prof. Merton for this Fellowship, which recognizes excellence in finance at MIT and more broadly in the world. He is a pioneer in the field of quantitative finance, conducting cutting-edge research throughout his career, including the creation of a new method to determine the value of derivatives for which he received the Nobel Prize in Economic Sciences.” 

John Cox, professor of finance at MIT Sloan, agrees, “We are pleased to honor Prof. Merton with this award for his leadership and innovation in both academia and the finance industry. As one of the founders of modern finance, his work was critical to the development of the derivatives market. He has been tremendously influential in the field and has received about every honor possible for an economist as well as honorary degrees from 13 universities around the world.”

MIT Sloan Prof. Andrew Lo, director of MIT Sloan’s Laboratory for Financial Engineering, notes, “While this award recognizes Prof. Merton’s past work in the derivatives industry, it also highlights his current research on retirement planning. Achieving financial security in retirement is a remarkably complex challenge and his groundbreaking research in this area will greatly benefit both individuals and society. Throughout his career, he has moved the field of quantitative investment management forward by leaps and bounds.”

MIT Sloan Prof. Robert C. Merton says, “I am deeply honored to be named the 2016-2017 S. Donald Sussman Fellow. I look forward to preparing and delivering the Sussman lectures on the powerful and productive interaction between financial science and finance practice, as exemplified by the life practice of S. Donald Sussman.”

In addition to his position at MIT Sloan, Merton is University Professor Emeritus at Harvard University and was the George Fisher Baker Professor of Business Administration and the John and Natty McArthur University Professor at Harvard Business School. He also is currently resident scientist at Dimensional Holdings, Inc., where he is the creator of a global integrated retirement funding solution system that addresses the deficiencies associated with traditional defined-benefit and defined-contribution pension plans.

Merton received the Alfred Nobel Memorial Prize in Economic Sciences in 1997. He is past president of the American Finance Association, a member of the National Academy of Sciences, and a Fellow of the American Academy of Arts and Sciences.

He is the author of Continuous-Time Finance and a coauthor of Cases in Financial Engineering: Applied Studies of Financial Innovation; The Global Financial System: A Functional Perspective; Finance; and Financial Economics. Recognized for translating finance science into practice, Merton received the inaugural Financial Engineer of the Year Award from the International Association for Quantitative Finance (formerly the International Association of Financial Engineers), which elected him a senior fellow. He received the 2011 CME Group Melamed-Arditti Innovation Award, and the 2013 WFE Award for Excellence from World Federation of Exchanges. A distinguished fellow of the Institute for Quantitative Research in Finance (Q Group) and a fellow of the Financial Management Association, Merton received the Nicholas Molodovsky Award from the CFA Institute. He is a member of the Halls of Fame of the Fixed Income Analyst Society as well as Risk and Derivatives Strategy magazines. Merton received Risk’s Lifetime Achievement Award for contributions to the field of risk management.

Focusing on finance theory, Merton’s research areas include lifecycle and retirement finance, optimal portfolio selection, capital asset pricing, pricing of derivative securities, financial innovation, and improving the methods of measuring and managing macro-financial risk.

Merton earned a BS in engineering mathematics from Columbia University, and an MS in applied mathematics from California Institute of Technology. After receiving a PhD in economics from MIT in 1970, Merton served on the finance faculty at MIT Sloan until 1988, at which time he was J.C. Penney Professor of Management.

About the S. Donald Sussman Fellowship

The Fellowship is named in honor of S. Donald Sussman, who has worked in alternative investments for more than 30 years and manages funds that focus on both quantitative and fundamental strategies. He is the founder of Trust Asset Management, the Paloma Funds, and New China Capital Management LLC. Sussman was the recipient of Institutional Investor’s Alternative Investment News Lifetime Achievement Award in 2004. He is a member of the Board of Trustees and Executive Committee, and co-chair of the Investment Committee of Carnegie Hall. He attended Columbia College and received a B.S. and an MBA from New York University.

The Sussman Fellowship is overseen by the MIT Sloan Finance Group. Sussman Fellows receive a $100,000 cash prize and share their insights on quantitative finance and the financial industry through three public lectures to be delivered at MIT Sloan during the year of the award.

About the MIT Sloan School of Management

The MIT Sloan School of Management is where smart, independent leaders come together to solve problems, create new organizations, and improve the world. Learn more at mitsloan.mit.edu.