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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
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