Archive for the ‘NEWS AND COMMENTARY’ Category

Searching for the next Swensen

06 / 14 / 2021
by Charles Skorina | Comments are closed

There is no place like America for exceptional investment talent.

Our country continues to produce and attract the world's best and brightest and, along with Canada and Mexico, owns 58% of the world’s financial assets ($136 trillion) and collected 64% of all asset management revenues ($150 billion) in 2020. See: Boston Consulting Group Global Wealth 2021.

But with all our talent and resources, the challenge of building superior investment teams that can endure and outperform over a decade or more is daunting and seldom achieved.

Yale, Princeton, MIT, and Bowdoin have had a great run.  Goldman Sachs and JPMorganChase have outlasted most of their peers.

And yet, while consistent, multi-decade superiority isn't impossible, it's exceedingly rare. Many redoubtable firms have just vanished.

There are a very few, semi-mythical beasts like the recently deceased  Mr. David F. Swensen, Ph.D., Yale’s long-serving chief investment officer and Warren Buffett, of course.

Swensen built a process for identifying superior outside managers, cementing relationships, and staying with them as long as they were judged to have the edge.  He was also an innovator with first-mover advantage in many respects which can't be replicated.

One of my professors at The University of Chicago once remarked that some money managers seem to have the touch.  And we can theorize, not always correctly, about how they do it.  But most of them have a run bracketed by a certain period or a set of conditions, and then they are gone.

Even James Simons of Renaissance Technologies – the best trader ever – just had a losing year.

Why is this?

Paul Wachter, former investment chair of the University of California Regents, outlined the criteria used by the UC regents during their search in 2014 for a chief investment officer.

Mr. Wachter listed three principal qualities the UC board looked for in a candidate.

Organizational skills: Someone with serious organizational skills, who could work effectively with a big institution like the UC system.

Personality: Someone with the personality to work constructively with all of those different constituents, from the board and president to student groups.

Investment skill: But he added a caveat to number three.

Mr. Wachter said, "what you can't tell in an interview is how good of an investor someone is.  If you look at their track record in their previous position, you're seeing the product of an entire team or institution."

As readers of The Skorina Letter have no doubt noticed, we spend a great deal of time mining and analyzing the investment performance and pay of asset managers and chief investment officers.  We look for skill and persistence and the data to support our search recommendations.

But, as Mr. Wachter points out, identifying a superior investment leader is not that simple.

Why?



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Cambridge Elevates Recently Appointed President to CEO

05 / 14 / 2016
by Charles Skorina | Comments are closed


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Institutional Investor article on CAS pay for performance

03 / 21 / 2012
by Charles Skorina | Comments are closed

Mellon’s John Hull Tops Non-Profit CIO Pay Rankings

Institutional Investor – March 15, 2012  •  Frances Denmark

Charles Skorina had a problem. As an executive search consultant specializing in filling investment officer holes at pension funds and endowments, he was often asked by boards of trustees to produce metrics to aid in candidate comparisons. But in his 30 years in the search business, such data had proved hard to come by ­— that is, until late January. That’s when Skorina’s “CIO Performance-for-Pay” ranking (see chart below) hit the institutional investor zeitgeist.



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Bloomberg: Help Wanted on Campus – Top U.S. universities are looking for a new breed of investment manager who can be nimble in tough times.

08 / 18 / 2010
by Charles Skorina | Comments are closed

Bloomberg: Help Wanted on Campus

By Gillian Wee - Aug 18, 2010

Bloomberg Markets Magazine

 

Top U.S. universities are looking for a new breed of investment manager who can be nimble in tough times.



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