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Investment Leadership and Portfolio Management: The Path to Successful Stewardship for Investment Firms

Investment Leadership and Portfolio Management: The Path to Successful Stewardship for Investment Firms

Brian D. Singer, Greg Fedorinchik

ISBN: 978-0-470-54333-7

Sep 2009

210 pages



An industry leader candidly examines the role of investment leadership in portfolio management

Investment Leadership & Portfolio Management provides a top down analysis of successful strategies, structures, and actions that create an environment that leads to strong macro investment performance and rewarding investor outcomes. By examining how to manage and lead an investment firm through successful investment decision-making processes and actions, this book reveals what it will take to succeed in a radically changed investment landscape. From firm governance and firm structure-for single capability, multi-capability, and investment and product firms-to culture, strategy, vision, and execution, authors Brian Singer, Barry Mandinach, and Greg Fedorinchik touch upon key topics including the differences between leading and managing; investment philosophy, process, and portfolio construction; communication and transparency; and ethics and integrity.

  • Leadership issues in investment firms are a serious concern, and this book addresses those concerns
  • Details the strong correlation between excellence in investment leadership and excellence in portfolio management
  • Written by a group of experienced professionals in the field, including the Chairman of the CFA Institute Board of Governors

Understanding how to operate in today's dynamic investment environment is critical. Investment Leadership & Portfolio Management contains the insights and information needed to make significant strides in this dynamic arena.



Chapter 1 Characteristics of Successful Asset Management Firms.

You Can Take the Boy Out of the Culture, but You Can't Take the Culture Out of the Boy.

Size Matters, but Not in the Way Most People Believe

Governance: The Guardian of an Investment-Driven Firm

Fostering Collaborative Freedom: Everybody is a Peer

Integrity: An Unquestionable Characteristic of Success


Chapter 2 Building a Cathedral: A Framework for Turning the Mission into Collective Action.

A Framework for Effective Leadership and Management.

Establishing and Living Organizational Values.

Creating Mission and/or Investment Philosophy Statements.

Strategic Goals and Key Performance Indicators.


Chapter 3 Building a Meritocracy:  Understanding, Evaluating and Rewarding Employee Contributions.

Performance: A Deeper Dive.

Horizon: The Fallacy of the Three Year Trade Record.

Performance Analysis: Practically Speaking.

Top-down and Bottom-up Approach to Determining Performance.

Designing Your Rating System to Help Make the Difficult Decisions.

What Does the Performance Score Really Mean?

Criticality: A Deeper Dive.

Merit Zones: Putting It All Together.

Communication of Performance and Criticality.

Values and Compensation.


Chapter 4 Investment Philosophy and Process:  A Lofty Cathedral Needs a Deep Foundation.

The Importance of Investment Philosophy and Process in Investment Organizations.

Investment Philosophy: Core Beliefs.

Investment Process: Control and Anarchy.

Avoiding the Pitfalls of Behavioral Biases.


Chapter 5 Investment Process in an Evolving World.

Implementation Overview: “The How” of the Investment Process.

Fundamental Valuation.

Market Behavior and How It Challenges the Fundamental Investor.

Team Behavior: Lessons for the CIO from Jelly Beans and Freud.

Portfolio Design.


Chapter 6 Communication for Superior Client Outcomes.

The Problem: Human Nature.

A Classic Tale.

Case 1: Individual Investors, the Impact of Performance Chasing.

Case 2: Are Institutional Investors the “Smart Money?”

The Reality of Investing in Equities.

The Mathematics of Recovery.

Dilemma: Investment Firm or Distribution Shop?

The Importance of Culture.

Sales and Marketing in an Investment Firm.


Appendix: Client Communication in Extreme Market Conditions.

Chapter 7 Where are the Clients' Yachts?: Reasonable Fee Structures.

The “Gamma Trade”.

Anatomy of a Blowup.

Catch 22.

Faults of Existing Fee Structures.

Our Recommendation: High Integrity Fee Structures.


Chapter 8 Final Thoughts.

Characteristics of Great Asset Management Firms.

It Starts With a Shared Mission and Values.

True Meritocracy.

Avoiding the Pitfalls.

For Successful Client Outcomes: Communicate, Communicate, Communicate.

It's All About Incentives.




About the Authors.