•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

Matthias Knab, Opalesque for New Managers:

FCLTGlobal, a think-tank founded in 2016 by BlackRock, Canada Pension Plan Investment Board, The Dow Chemical Company, McKinsey & Company, and Tata Sons, has published a paper with relevant insights into factors associated with long-term performance of asset managers, finding that employee ownership is a key indicator to look out for.

The analysis of asset managers covers those who self-report to eVestment (aggregate $45.6 trillion in assets under management, or AUM). Long-term performance is measured in terms of five-year gross returns across equity, fixed-income, and mixed portfolios among asset managers.

According to FCLTGlobal's model, asset managers who score well on key long-term predictors - those at the 75th percentile - generate annual gross returns that are 90 basis points higher than asset managers at the 25th percentile.

Asset managers with the strongest long-term gross returns tend to have a high level of employee ownership, which may help to align incentives. Having high net inflows is also a positive indicator, though this finding may reflect the ability of successful managers to attract money - rather than any tendency for growth to improve returns.

On the flip side, turnover among portfolio managers is an indicator of trouble ahead as is strategy proliferation.

In contrast to corporations - where the factors a......................

To view our full article Click here