NEW YORK, February 2022 – Transparency Technologies LLC (“Transparency®”), a company with a mission to accelerate the world’s adoption of transparency, released the largest conclusive third-party research by Dr. Derek Horstmeyer of George Mason University (GMU) School of Business on Transparency as a driver of portfolio performance. The research paper compares the return performance over a 5-year period between transparent and non-transparent publicly traded companies.
Through his independent and extensive research, Dr. Horstmeyer discovered that publicly traded transparent companies outperform their counterparts on average by 50 basis points per month, which yields an abnormal return of over 6 percentage points per annum. This research paper is under submission at Financial Analysts Journal.
“The study’s conclusion perfectly aligns with our research and investment thesis that Transparent companies outperform their peers due to less friction, superior cultures, greater innovation, and impact,” said Transparency’s Founder and Chairman Paul Pagnato.
Dr. Horstmeyer is a full professor at GMU School of Business, specializing in corporate finance. His research, which has garnered several awards, focuses on boards, governance, and hedge fund activism. He is a monthly contributor to the Wall Street Journal, oversees the GMU Student Managed Investment fund, serves as Director of the new Financial Planning & Wealth Management major at GMU, and is consistently rated a top professor by his students.
“We find that firm transparency is associated with firm excess returns (after controlling for all factors known to drive returns),” said Dr. Horstmeyer. “Interestingly, Transparency Benchmarks, Transparent Costs™, and Total Accountability are the primary drivers of excess returns in transparent firms.”