History

In founding the Q Group in 1966, Dale Berman’s intention was to explore the application of “Modern Capital Market Theory (MPT)” as theorized by Harry Markowitz in his 1952 book. The Q Group began with 29 member firms interested in studying the applicability of Markowitz’ theory to the investment process. By joining together, this small cadre of firms felt that by working cooperatively, they would be able to find ways to improve the investment process. The original Board of Directors was comprised of seven individuals who were highly regarded by their institution and held a strong belief in disciplined investing.

From the very beginning, the focus of the Q Group was to offer presentations made by members of both the investment and academic communities in order to foster an active interchange of ideas. In the beginning, two seminars lasting three days each, were offered each year and continues to this day. Practitioner and academic research remains the core of Q’s presentations. As originally envisioned, members share their thinking with competitors on methodology and practice. From the beginning everyone recognized that resulting interpretations would vary from member-to-member and there would never be a consensus on a single approach to managing investments. Today, the Q Group seminars are renowned for presentations at the forefront of thinking by leaders in the field. By it’s 40th anniversary conference, no less that four Nobel Laureates and fellows of the Q Group—Bill Sharpe, Harry Markowitz, Myron Scholes, and Bob Merton—were honored speakers.

In the 1960s, a quantitative approach to investing exemplified new thinking to the industry. There was a need for tutorials on a range of technical subjects that were not taught in finance and investment practice; such as identifying the values, uncertainties and other issues relevant in a given decision, its rationality, and the resulting optimal decision the Q Group played an active role in bringing these tools to the practitioners in the investment profession.

Over Q Group’s history, $2 million in financial support has been provided to advance research in quantitative studies and applications. For almost 50 years the Q Group has played an active role in funding academic research. In the early days, Financial Research Centers were established at Dartmouth, Ohio State, Princeton and Stanford. To become more effective, the Q Group’s focus shifted to research of individual professors. Through these academic collaborations, the Q Group provided leadership and funding of a diverse list of projects, many of which have been published in numerous professional and academic journals. In 2014, Q’s funding of individual research projects was terminated in favor of a prize award for new working papers showing promise. The prize was named in honor of Jack Treynor who has, over the years, made major contributions to finance theory and continues to be an active participant in Q.

In its first five years, the Q Group membership grew steadily. However, in the early 1970’s financial services entered a difficult period that resulted in a spate of mergers that adversely affected Q and caused a significant loss in the number of members. Recognizing that the organization’s future was in jeopardy, a new board led by James Farrell energized the Q Group by introducing new exciting programs and having an aggressive approach to promoting membership. As a result, In the 1980’s Q membership sharply increased and today, the organization consists of 140 corporate members routinely bringing together 175-200 delegates. In 2016, the Q Group will celebrate its 50th year representing a milestone in an industry where change is rapid and constant.