An Advocacy for a Chief Performance Officer (CPO)

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An Advocacy for a Chief Performance Officer (CPO)
Ioannis Segounis, CFA, CIPM, Phocion Investment Services

The performance industry has evolved considerably over the past decade. Concepts such as performance calculation, presentation, evaluation, and attribution have become more complicated than ever. Despite progress, the investment performance practice remains at its infancy. Department heads such as Chief Risk Officer and Chief Compliance Officer are common place nowadays in most large investment firms, but performance lags behind and the question asked should be, “why?” This article is an advocacy for the Chief Performance Officer and looks into why the current structure is not optimal with both firms and investors missing out on the glaring advantages of a true independent and objective performance department.

An Advocacy for a Chief Performance Officer (CPO)
Ioannis Segounis, CFA, CIPM, Phocion Investment Services

 

The performance industry has evolved considerably over the past decade. Concepts such as performance calculation, presentation, evaluation, and attribution have become more complicated than ever. Despite progress, the investment performance practice remains at its infancy. Department heads such as Chief Risk Officer and Chief Compliance Officer are common place nowadays in most large investment firms, but performance lags behind and the question asked should be, “why?” This article is an advocacy for the Chief Performance Officer and looks into why the current structure is not optimal with both firms and investors missing out on the glaring advantages of a true independent and objective performance department. For the most part, performance reports to other departments such as Operations and Risk, with COOs and CROs placing their own interest before that of performance. Without a CPO, performance’s needs get drowned out by the needs of the other departments. The unbiased feedback available to the Front Office is missed out on and investors do not have an independent resource to consult with all things performance. As awareness is raised and all stakeholders in the investment industry take notice, greater demand will push for the creation of the CPO sooner rather than later.

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