Prof. Heinz Zimmermann is a prominent figure in the Swiss financial world. After an outstanding academic career and numerous publications in leading journals, he gave his farewell lecture, “On Capital Ideas, Models, and Data,” at the University of Basel last year. However, his involvement did not end with his retirement from academia: he has continued to pursue ambitious projects, such as his work on demographic risks within the framework of the WDA Forum, which was honored with the Swiss Risk Award. In recent years, several OLZ research projects have also been nominated for this award, including a comparable study on measuring and hedging climate risks in financial markets.
Interview with Prof. Heinz Zimmermann on the Swiss Risk Award and the new MBA program
In this interview, Heinz Zimmermann shares his thoughts on the benefits of alternative risk measures, as well as his new Executive MBA in Finance program, and talks about the exciting challenges that await future finance professionals.
“I am particularly interested in the further development of quantitative approaches in asset management.”
Gianluca De Nard (interviewer): What are you passionate about now, after such an impressive academic career?
Heinz Zimmermann: I am still fairly active in the academic world. After my farewell lecture, I began to devote more time to larger, fundamental questions that have fascinated me for a long time. One area that particularly interests me is the further development of quantitative approaches in asset management and the role of artificial intelligence in the financial world. I have spent most of my career collecting data, developing models, and analyzing capital markets. Today, however, the question is how we can use these new technologies efficiently in practice. Another focus is on integrating financial innovations into academic research and transferring them into practice.
Last year, you won the Swiss Risk Award together with the WDA Forum (World Demographic & Ageing Forum). Congratulations. The WDA Forum deals with the effects of demographic change on the financial markets.
Yes, we launched the “Financial Demography” project about five years ago. The central question was: How do demographic changes, such as an aging population, affect capital market activity? There is already some research on the topic, but we wanted to better understand and quantify the systematic effects.
"How do demographic trends in China affect the share price of a company like Nestlé?"
We also conduct research in the field of innovative risk indicators, with a focus on measuring physical and transitional climate risks, their impact, and hedging options on the capital markets. Could you briefly explain what your project is specifically about?
One key result was the development of a demographic risk indicator by our team led by Manuel Buchmann, which makes it possible to visualize the impact of demaographic changes on individual stocks or entire sectors. For example, how do demographic developments in China affect the share price of a company like Nestlé? The indicator shows that demographic changes may be slow, but they are extremely long-lasting—and these risks cannot simply be ignored.
Would you implement related investment strategies passively or actively?
The selection would of course be an active decision, but otherwise you would assume a longer investment horizon. Ultimately, no investment decision is purely active or passive. There are various tried-and-tested approaches that show how to optimally combine the two. The minimum variance approach, which OLZ has been pursuing for a long time, also provides such an investment building block.
Together with your colleagues, you have developed a new Executive Master in Finance, which you offer as a cooperation between the Universities of Basel and Tilburg (NL) and which leads to a double degree from both universities (MBA Finance | Executive Master in Finance MiF). What is the focus of this new program, and how does it differ from other MBA programs?
The MBA in Finance aims to establish the connection between financial theory and capital market practice. Unlike other programs, our MBA is not primarily aimed at quantitative experts. Instead, we appeal to people who work in medium-sized or larger companies and may have already heard of accounting or portfolio theory, but want to understand the deeper connection between corporate finance and capital markets. The focus is on showing participants how these two areas intertwine. We want students to learn how modern theories can be implemented in business practice – all from an international perspective. Another distinguishing feature is that we cover specific topics in modules such as institutional asset management and applications of DLT (distributed ledger technology) in financial innovation, which tend to be neglected in other MBA programs.
How did you come up with the idea of designing this international MBA together with Tilburg University?
The University of Basel has always had good relationships with international universities. The collaboration was an obvious choice, as Prof. Pascal Böni and his research colleagues in Tilburg have outstanding expertise in applied finance. This combination of theory and practice fit perfectly with our vision. Together, we developed the curriculum, paying close attention to the complementary strengths of both universities. We deliberately integrated modules that focus on practice, such as mergers and acquisitions, the design of institutional investment processes, and the functioning of modern stock exchange and trading systems. Tilburg also brings a very practice-oriented approach to the table, which makes the collaboration particularly fruitful.
What about the workload in the MBA program?
Our MBA program is designed to be taken alongside work, and we recommend that participants reduce their working hours to around 70-80% in order to have enough time for their studies. Classes take place three days a month in Basel. These attendance times are important for promoting exchange between participants. However, students should also plan for preparation and follow-up work, so that they spend around 15-20 hours per week on the program.
“We have a clear focus on corporate finance, institutional asset management, and capital markets.”
Finally, is there anything else you would like to highlight in particular?
I think what makes our MBA special is the close connection between theory and practice. We have a clear focus on corporate finance, institutional asset management, and capital markets, and offer participants the opportunity to apply this knowledge directly in their professional environment. The cooperation between two renowned universities also gives the program an international perspective, which is essential in today's globalized financial world.
