Professor of Financial Economics
Director of the Master of Finance (MFin) Programme
BA (IBMEC Business School), MSc (Fundação Getulio Vargas (EPGE)), PhD (London Business School)
My research interests include security lending markets, short selling, liquidity risk, and how differences of beliefs affect trading volume. My consulting experience is centred on valuation, including work as an expert to international arbitration courts, and the analysis of pharmaceutical firms’ value.
I’m a member of the Finance subject group at Cambridge Judge Business School, which focuses on the investment and financial decisions of firms and institutions.
Professional experience
Professor Saffi’s previous teaching experience includes courses for MBA, EMBA, MPhil and Executive Education students at Cambridge Judge Business School, IESE, London Business School, Reykjavik University (Iceland), Fundação Getulio Vargas (Brazil) and Nile University (Egypt). His consulting experience is centred on valuation, including work as an expert to international arbitration courts, and the analysis of pharmaceutical firms’ value. He has presented his work in the most prestigious academic conferences and contributed with articles to popular press. Dr Saffi is a member of the Cambridge Corporate Governance Network (CCGN).
Previous appointments
From 2007 Professor Saffi was Assistant Professor of Finance at IESE Business School in Barcelona, Spain.
Selected publications
- Reed, A.V., Saffi, P.A.C. and Van Wesep, E.D. (2021) “Short-sales constraints and the diversification puzzle.” Management Science, 67(2): 1159-1182 (DOI: 10.1287/mnsc.2019.3467)
- Saffi, P.A.C. and Vergara-Alert, C. (2020) “The big short: short selling activity and predictability in house prices.” Real Estate Economics, 48(4): 1030-1073 (DOI: 10.1111/1540-6229.12219)
- Richardson, S., Saffi, P.A.C. and Sigurdsson, K. (2017) “Deleveraging risk.” Journal of Financial and Quantitative Analysis, 52(6): 2491-2522 (DOI: 10.1017/S0022109017001077)
- Porras Prado, M., Saffi, P.A.C. and Sturgess, J. (2016) “Ownership structure, limits to arbitrage and stock returns: evidence from equity lending markets.” Review of Financial Studies, 29(12): 3211-3244 (DOI: 10.1093/rfs/hhw058)
- Aggarwal, R., Saffi, P.A.C. and Sturgess, J. (2015) “The role of institutional investors in voting: evidence from the securities lending market.” Journal of Finance, 70(5): 2309-2346 (DOI: 10.1111/jofi.12284)
- Saffi, P.A.C. and Sigurdsson, K. (2011) “Price efficiency and short selling.” Review of Financial Studies, 24(3): 821-852 (DOI: 10.1093/rfs/hhq124)
Visit Professor Saffi’s website for a more comprehensive list of his publications.
Awards and honours
- Crowell Third Prize for the paper “Deleveraging risk” (with Scott Richardson and Kari Sigurdsson), Quantitative Research Group at PanAgora Asset Management, 2015
- Best Paper Award for the paper “Deleveraging risk” (with Scott Richardson and Kari Sigurdsson), Financial Management Association International (FMA) Consortium for European Finance Faculty, 2014
- Inquire Europe Award, 2013
- Outstanding Teaching Award, Cambridge Judge Business School, 2012
- Research Award, Q Group, 2012
News and insights
ESG and sustainability
Do short sellers care about Environment, Social and Governance?
CERF Fellow Oğuzhan Karakaş, and research collaborators Pedro Saffi (a former CERF fellow) and Mehrshad Motahari (a former CERF Research Associate), analyse whether the short sellers can anticipate negative ESG incidences of firms, and make money from the negative price reactions to the news announcement of such incidences.
Study co-authored by Pedro Saffi of Cambridge Judge Business School wins Best Paper in Corporate Finance Award at the Society for Financial Studies Asia-Pacific conference.
MFin Director, Professor Pedro Saffi, travelled to Mexico City in August. During his visit he had the chance to meet and connect with some of our Mexican alumni and new students.
Media coverage
Market Watch | 24 February 2023
Do happier workers lead to better investment returns?
PhD candidate Elias Ohneberg and Pedro Saffi, Professor of Financial Economics and Director of the Master of Finance (MFin) Programme at Cambridge Judge Business School, are featured in this article about how much impact employee happiness has on investment returns.
Institutional Investing | 7 April 2021
Large short sellers in the area? Activist campaigns are more likely to succeed
A study on hedge fund activism co-authored by Dr Pedro Saffi, Reader in Financial Economics at Cambridge Judge Business School, featured in the article. The study found that “activist investors are more likely to start new campaigns in companies that have already attracted the interest of large short sellers.” Dr Saffi commented: “Often, it’s much more difficult to be a short seller than an activist. The typical position of a hedge fund activist tends to be larger than the larger short sellers. Often, activists create a kind of coalition, called wolfpacks, to try to implement changes with management.”
BBC | 19 February 2021
World Business Report
Dr Pedro Saffi, Reader in Financial Economics and Director of the Master of Finance at Cambridge Judge Business School, recently appeared on BBC commenting on US congressional hearings on GameStock share trading. Dr Saffi went on to say that lots of professional investors are going to start paying much more attention than they do at the moment in the market sentiment that is coming from those small investors on Reddit. “People were very surprised by the fact that the hedge funds and other large investors were kind of beaten up by the small traders that were following that Reddit forum.”