Andrew Lo

Andrew Lo is the Charles E. and Susan T. Harris Professor at MIT Sloan School of Management and director of the MIT Laboratory for Financial Engineering. His Adaptive Markets Hypothesis (2004, expanded in book form 2017) argues that market efficiency is not a binary property but evolves dynamically as market participants adapt — bridging the gap between rational expectations models and behavioral finance anomalies. Lo has published extensively on hedge fund risk, tail risk, systemic risk, and the statistical properties of financial time series. He directs AlphaSimplex Group, a quantitative investment management firm, applying his research commercially. His work on the biology of financial decision-making and on measuring financial systemic risk has influenced central banks and regulators post-2008. Lo is also known for research on hedge fund return smoothing and liquidity risk, demonstrating that reported returns can significantly understate actual volatility.