Focussing more on negatives as they are always more juicy! Some of these are more industry-wide negaties as well.
- smart people (ie MBAs and can talk the talk) but not the smartest investors in my opinion. Basically end up with former clients advising clients and missing real investment killer instinct! Have people choosing and harshly critiquing equity managers or hedge funds (for example) who have never been close to running equity portfolios or hedge funds (more an industry issue!).
- focus on client management (end up with some bad investment managers in my opinion, but good client managers, running large amounts of money / making decisions / being partners!). Constantly worried about clients' reaction to a period of weak performance, which inhibits ability to be truly unconstrained investors and to truly focus on long-term performance. Constant internal dilemna between doing interesting investments and clients not being happy with potentially adverse results.
- lots of misplaced egos / overconfidence (particularly apparent in senior people), end up being too stuck in our ways! This issue is part and parcel of the client-facing investment management industry though and is rife in the vast majority of interactions internally and externally (asset managers). Manifests itself into thinking the firm is the best (anyone outside is inferior) and everything we do is the only way to do things, just means there's not much innovation. Current investment philosophy has been the same for over 10 years! #iloveeneb. Also manifests itself into constantly trying to second guess every little detail in everything and everyone (internal and external). Too much misplaced confidence in our opinions when you're dealing with investments (which sometimes take random walks...hence what you get paid for! #googlestochasticprocesses).
- real focus on what other people are investing in and too afraid to lead the way (to some degree but probably ahead of private banks I imagine) - ain't never going to be the best that way! Business risk is the over-riding factor in many of the more risky investment decisions.
- junior employees are a commodity (part of business model and makes sense). Given the business model they don't need to retain you if you're not directly dealing with clients and there's not much value add from most people in terms of investment accumen / selecting managers as you're quite replaceable. However, there is potential to rise through the ranks if you meet certain criteria given growth and healthy turnover of the firm.
