Asset Managers: Compensation and Performance (Part I)
As recruiters we work both sides of the investment-management street: serving not-for-profits like foundations and endowments, and also fee-based (and mostly for-profit) money managers.
Those fee-based managers, especially the big ones, are newsworthy because they invest a lot of money for a lot of customers, including non-profits investors.
They’re closely watched by business reporters and financial analysts, who are always hunting for breaking news that might move the markets.
We have a different focus: we are more interested in the market for executive talent than in the markets for investable assets and we’ve been looking at the money-managers from that angle for quite a while. Ultimately, we want to understand how the performance of their CEOs and senior managers is judged, how they are compensated, and why they are hired and fired.
We begin with a list of 36 publicly-traded, fee-based U.S. asset managers. Most money managers are private and keep their compensation data away from prying eyes like ours. Which means that our list includes a substantial sample of all publically listed asset management firms in the US, the only public and comprehensive source for the data we need.
However, we think the $16.5 trillion managed by our 36 SLAM firms is a useful proxy for judging executive performance.
From a headhunter’s point of view our 36-company SLAM list is intimate enough so we will be able to examine in detail (and almost real-time) the performance of individual CEOs as they try to turn AUM into revenues and earnings for their stockholders.
It’s also the starting point for an analysis of their asset flows, revenues, earnings, and management performance which we’ll roll out in subsequent letters.Read More »