John O'Brien Honored for Innovations in Investment Profession


John O'Brien
The man who invented the Wilshire 5000 index and helped launch the Haas School's Master's in Financial Engineering Program, John O'Brien, received the 2004 Matthew R. McArthur Award by the Investment Management Consultants Association (IMCA) at its annual conference in Boca Raton, Florida, on April 25.

IMCA recognized O'Brien for his outstanding contributions to the investment consulting profession, including the Wilshire 5000 index, investment policy analysis, asset/liability management, and risk-adjusted performance measurement.

In 1969, O'Brien established the first pension consulting activity based on modern portfolio theory. Prior to O'Briens innovations, the industry had relied solely on peer-group rate of return comparisons.

In 1972, O'Brien opened his own consultancy, O'Brien Associates, to further develop modern portfolio theory applications for institutional asset managers and pension funds. In 1973, he introduced the O'Brien 5000 index, which was later renamed the Wilshire 5000 after O'Brien sold the business and its name was changed to Wilshire Associates. The Wilshire 5000 is the largest and only comprehensive index tracking the performance of all publicly traded stocks in the US, now worth about $10,275,000,000,000. Changes in the index directly measure the change in market value of all US stocks.

In 1980, O'Brien teamed with Haas professors Hayne Leland and Mark Rubinstein to form Leland O'Brien Rubinstein Associates (LOR). LOR is credited with many innovations, including portfolio insurance," options-based asset/liability hedging, and the first exchange-traded index fund.

In 1987, Fortune magazine listed Leland, O'Brien, and Rubinstein among its "Men of the Year."