portfolio managers

It’s A Lot About the People

A few weeks back, Ignites ran a poll (subscription) on the desirability of marketing star portfolio managers to retail investors. 60% of respondents indicated that focusing on the star PM is an unfavorable strategy.

It’s an interesting question, and despite the fact that there is no absolute answer you can count me in the minority. I’m not advocating promotion of a singular star necessarily, but more aggressive marketing of the investment team in general. It’s a weird quirk that the presentation of a investment strategy so often places the people driving that strategy in the background. The investment philosophy and process of most active mutual funds, for example, is broad enough where two different PMs can make markedly different decisions, craft different portfolios, and deliver significantly different results. So isn’t the person driving that fund paramount?

There is already evidence of firms raising the profiles of investment staff. Oppenheimer and JPMorgan offer two examples. I’d argue that asset managers will (and should) continue to build more depth around people in marketing their products. Going further, I think a greater focus on people will emerge in the passive space; after all, passive strategies are still ultimately designed by human beings.

Sure, there are always risks associated to marketing individuals. They change jobs. They retire. Some have personal shortcomings. Some are less than photogenic. But the reality is that the individuals are largely what firms need prospective investors to buy, and so they need to be a big part of any product’s story.