Active Managers: The Time is Now
Clare Flynn Levy, the CEO of Essentia Analytics and a friend of Alpha Theory, wrote an article that I wish I could claim. It sums up many of the reasons why the “time is now” to optimize process to stay competitive.
At the end of the day, whether the strategy is hedge or long-only, active management involves a portfolio manager who reviews the information presented by analysts, risk systems and external sources, and then makes what is ultimately a qualitative judgement call.
Now, more than ever, is the time to stop and consider how you could be learning from past success and mistakes in a more efficient way, refocusing your team’s energy on doing more of what you’re good at, and less of what you’re not.
For even though investment management is an industry whose true value proposition is the way decisions are made, very few managers are doing anything to make the decision-making process a provable competitive advantage for themselves.