Performance Perspectives Blog

Outcome oriented / client centered investing

by | Jan 17, 2013

The concept of orienting your investing so that it’s geared to the client’s requirements is getting more attention of late. P&I had an article on this subject in their November 12, 2012 issue, and Steve Campisi, CFA has addressed this at several of The Spaulding Group events, including our Performance Measurement, Attribution & Risk (PMAR) conferences. Steve and I are in discussions with another colleague about giving this subject even greater attention and focus.

One of my concerns is the practicality of having each of a plan sponsor’s managers sensitive to the same objective; oriented to the same goal(s). Does this make sense? Is this appropriate?

You may have heard of the “Myners Report” (aka, Myners Review) which was delivered by then Gartmore chairman Paul Myners back in 2001. The actual report is about 200 pages long; I recommend this, as well as my books, as effective insomnia cures.

I won’t pretend that I’ve read the entire document, though I did review much of it when it was first published, and I recall strong support for the use of liability-related benchmarks.

The question, I think, should be to whom these benchmarks are used. I’d think the plan, itself. As for the managers, they should be selected as part of their (the plan’s) overall strategy to meet or exceed their benchmark. However, judging these managers by this same benchmark seems incorrect to me. Your thoughts?

 
 

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