Flexible Gerard Fellowships Help Graduate Students Find Their Way

The freedom to explore new research areas as a graduate student helped alum James Gerard, a longtime veteran of Fidelity Investments, discover his path.

James Gerard (MS '83, PhD '85) did not know exactly where his graduate studies in economics would lead when he first arrived at Caltech. "I had this kind of cockeyed idea of what I was going to do when I first got there," he says, with interdisciplinary research in natural resource economics being his first notion. "But thanks to the support I received at Caltech, I was able to come up with a new direction, which is where I wound up writing my thesis."

Under the guidance of Caltech faculty such as Kim Border, Jennifer Reinganum, and Louis Wilde, Gerard found he had a passion for researching the properties of markets with incomplete information, a hot topic in economics in the 1980s that focused on how consumers make decisions when they don't know everything they need to know about a product or an investment. For example, he researched how warranties act as signals to consumers that a company believes in the quality of its product, and how stock dividends signal to investors a company's confidence in its long-term profitability.

That move, he says, was only possible because of the financial backing Caltech provided him. "I was supported on a fellowship my second year as a Caltech graduate student, and it was the freedom of that year that let me figure out what area of inquiry I wanted to explore," Gerard says.

This work sparked in Gerard a lifelong interest and long career in financial markets. Now a team lead for global asset allocation investment research at Fidelity Investments, Gerard realized he wanted to give current students in Caltech's Division of the Humanities and Social Sciences the kind of freedom that propelled his career. That is why he chose to endow the James and Karen Gerard Graduate Fellowship, becoming the first HSS alum to create a fellowship opportunity within the division. Gerard says this fellowship is meant to support students so they can pursue research topics independently, just as he did.

"In many ways, it is the strength of its graduate programs that defines Caltech," says Jean-Laurent Rosenthal (PhD '88), the Rea A. and Lela G. Axline Professor of Business Economics and Ronald and Maxine Linde Leadership Chair for the Division of the Humanities and Social Sciences. "Offering fellowship support is critical both to our ability to attract the most promising students and to their success in the program."

After Gerard completed his Caltech doctorate, he taught courses in the economics of uncertainty at Rutgers University in the mid-1980s. Shortly thereafter, he moved to the private sector, performing quantitative research for Morgan Stanley in the early days of mortgage-backed securities. In 1990, when Fidelity formed a research group so that it would not have to rely on Wall Street, Gerard joined that group and the company, where he has worked for three decades. He now helps to manage more than $300 billion in long-term assets for investment portfolios.

Gerard has maintained close ties to the Institute: he attends local (and now virtual) Caltech Associates events and, in 2020, he was among those who created a fund to name the campus's experimental economics laboratory after Charles Plott, the William D. Hacker Professor of Economics and Political Science, who was a young professor when Gerard was a student in the 1980s.

Gerard's new fellowship endowment is eligible for the Gordon and Betty Moore Graduate Fellowship Match, which will amplify the effect of Gerard's gift. "These new fellowships to support graduate students are free of a connection with a professor and his or her grant, with the idea to make more graduate students into kind of free agents: to support them without their having to be beholden to a particular professor's program of research," Gerard says. "They're going to be great for allowing students to pursue really creative thesis topics and research areas."