Professor of Finance
Francesco Franzoni is Full Professor of Finance at the Università della Svizzera italiana. He joined SFI in 2007 and has held an SFI Senior Chair since 2012. Prof. Franzoni obtained his PhD in Economics from the Massachusetts Institute of Technology. His research has been published in the top finance journals worldwide and has featured in the international press. He is a regular speaker at leading academic conferences on finance.
Listen to Prof. Francesco Franzoni speak about his research.
His general research interests are in asset pricing, hedge funds, private equity, mutual funds, and ETFs. He focuses, in particular, on the impact of institutional investors on market prices and liquidity.
In a recent paper, Prof. Franzoni and his co-author investigate the determinants of limits of arbitrage for liquidity providers. Using data on institutional transactions, the researchers compare hedge fund trades to those of other institutions and find that hedge funds’ liquidity supply is more relevant for stock-level liquidity, but is also more exposed to financial conditions than that of other institutions. They also identify leverage, low redemption restrictions, asset illiquidity, and reputational capital as a sufficient set of characteristics that explain the exposure of hedge funds’ liquidity supply to funding conditions. Finally, data suggest that the trades of financially constrained hedge funds underperform, for at least one quarter, following negative funding shocks.