Alumnus Donates $5 Million For Center on Risk Research

A $5 million gift donated this week by UC Berkeley alumnus Coleman Fung will establish a new risk management research center on campus.

The Coleman Fung Risk Management Research Center will be an interdisciplinary effort chaired by a member of the economics department to analyze the role and mitigation of various forms of financial, physical and environmental risks in decision-making.

“My vision is that I would like to see better risk management practices adopted by companies and countries so that resources are better allocated and better utilized with less waste,” said Fung, who graduated in 1987 with a degree in industrial engineering and operations research.

Fung, chief executive officer of the trading and risk management firm OpenLink Financial Inc., donated the gift from his personal funds, and his company will contribute an additional $250,000 each year for the next four years to support the establishment and operation of the center.

The funds will go toward several research initiatives for faculty and students.

An advisory committee of members from various departments—including economics, industrial engineering and operations research and the Haas School of Business—will provide

guidance on the center’s research and operation and act as ambassadors to their respective departments.

One possible research initiative is the establishment of a risk management computer lab in the department of industrial engineering and operations research, said Robert Anderson, a professor of economics and mathematics.

“Not all companies are good at thinking about risk clearly,” said Benjamin Hermalin, chair of the economics department. “The center is going to formalize and study how risk can be best thought of and how executives and managers can take risk into account in decision-making.”

The center will also focus on environmental risk, which is a relatively new area of research that will be increasingly important with the impacts of globalization, Fung said.

“As you look at the giant developing economies like China and India, there will be a lot of competition for constrained resources, and risk management is the best mechanism for the market to prize natural resources,” he said.

In past years, Fung also donated $5 million for the China Research and Information Center in the C. V. Starr East Asian Library and Chang Lin-Tien East Asian Studies Center, now under construction, and additional funds for an endowed chair in the College of Engineering.

This most recent donation comes after Chancellor Robert Birgeneau announced in a press conference in the beginning of the semester a record $347.6 million in donations raised last year.

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