Investment Leadership and Portfolio Management

Preface. Acknowledgments. Chapter 1 Characteristics of Successful Asset Management Firms. You Can Take the Boy Out of the Culture, but You Can't Take the Culture Out of the Boy. Size Matters, but Not in the Way Most People Believe Governance: The Guardian of an Investment-Driven Firm Fostering Collaborative Freedom: Everybody is a Peer Integrity: An Unquestionable Characteristic of Success Conclusion Chapter 2 Building a Cathedral: A Framework for Turning the Mission into Collective Action. A Framework for Effective Leadership and Management. Establishing and Living Organizational Values. Creating Mission and/or Investment Philosophy Statements. Strategic Goals and Key Performance Indicators. Conclusion. Chapter 3 Building a Meritocracy: Understanding, Evaluating and Rewarding Employee Contributions. Performance: A Deeper Dive. Horizon: The Fallacy of the Three Year Trade Record. Performance Analysis: Practically Speaking. Top-down and Bottom-up Approach to Determining Performance. Designing Your Rating System to Help Make the Difficult Decisions. What Does the Performance Score Really Mean? Criticality: A Deeper Dive. Merit Zones: Putting It All Together. Communication of Performance and Criticality. Values and Compensation. Conclusion. Chapter 4 Investment Philosophy and Process: A Lofty Cathedral Needs a Deep Foundation. The Importance of Investment Philosophy and Process in Investment Organizations. Investment Philosophy: Core Beliefs. Investment Process: Control and Anarchy. Avoiding the Pitfalls of Behavioral Biases. Conclusion. Chapter 5 Investment Process in an Evolving World. Implementation Overview: "The How" of the Investment Process. Fundamental Valuation. Market Behavior and How It Challenges the Fundamental Investor. Team Behavior: Lessons for the CIO from Jelly Beans and Freud. Portfolio Design. Conclusion. Chapter 6 Communication for Superior Client Outcomes. The Problem: Human Nature. A Classic Tale. Case 1: Individual Investors, the Impact of Performance Chasing. Case 2: Are Institutional Investors the "Smart Money?" The Reality of Investing in Equities. The Mathematics of Recovery. Dilemma: Investment Firm or Distribution Shop? The Importance of Culture. Sales and Marketing in an Investment Firm. Conclusion. Appendix: Client Communication in Extreme Market Conditions. Chapter 7 Where are the Clients' Yachts?: Reasonable Fee Structures. The "Gamma Trade". Anatomy of a Blowup. Catch 22. Faults of Existing Fee Structures. Our Recommendation: High Integrity Fee Structures. Conclusion. Chapter 8 Final Thoughts. Characteristics of Great Asset Management Firms. It Starts With a Shared Mission and Values. True Meritocracy. Avoiding the Pitfalls. For Successful Client Outcomes: Communicate, Communicate, Communicate. It's All About Incentives. Integrity. Notes. Bibliography. About the Authors. Index.