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Alternative Market Briefing

Other Voices: A Very Crowded Trade

Friday, January 27, 2012

This article was authored by Richard Harris, fund manager at Port Shelter Investment Management, based in Hong Kong. He compares the investment management industry to what it was like 26 years ago.

I remember a former Managing Director asking me to write a message to Head Office on a blank sheet of paper leaving space for others on the page so that we could send a full handwritten sheet back to Europe overnight. This was ‘generation one’ of the fax and each page cost a fortune to send. After 26 years, and a recent change of role, it is time to bring a little perspective to this Very Crowded funds management business.

Technology has revolutionised the funds management business in the last 26 years, changing it from a regional industry, where even then I was able to run money from Asia investing into Europe, into a global business capable indeed of bringing down the financial system.

My own creative jump on my competitors around 1988 was when I invested in an early fax machine to get the European closing news sent to me at 3.30 am so that I could speak to my Australian clients a four hours later. This was good for business but had a key drawback in that the ring would wake the family up – solved by cutting the wire to the offending bell.

Back then, managers benchmarked against a stock, bond or other index and the best beat the rest of the pack; now a young manager can get lucky for two or three years, raise a lot of money and then blow it al......................

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