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GREG FEDORINCHIK is head of investor solutions at Mesirow Advanced Strategies, Inc., an institutional fund of hedge funds firm based in Chicago. Prior to joining Mesirow, he was a senior strategist with the global investment solutions team at UBS Global Asset Management (formerly Brinson Partners, Inc.) and a member of the asset allocation and currency committee. Fedorinchik holds an MBA from the Kellogg School of Management, Northwestern University.
Preface | p. xi |
Acknowledgments | p. xvii |
Characteristics of Successful Asset Management Firms | p. 1 |
You Can Take the Boy Out of the Culture, but You Can't Take the Culture Out of the Boy | p. 3 |
Size Matters, but Not in the Way Most People Believe | p. 7 |
Governance: The Guardian of an Investment-Driven Firm | p. 12 |
Fostering Collaborative Freedom: Everybody is a Peer | p. 19 |
Integrity: An Unquestionable Characteristic of Success | p. 23 |
Conclusion | p. 25 |
Building a Cathedral: A Framework for Turning the Mission into Collective Action | p. 27 |
A Framework for Effective Leadership and Management | p. 28 |
Establishing and Living Organizational Values | p. 29 |
Creating Mission and/or Investment Philosophy Statements | p. 31 |
Strategic Goals and Key Performance Indicators | p. 33 |
Conclusion | p. 37 |
Building a Meritocracy: Understanding, Evaluating, and Rewarding Employee Contributions | p. 39 |
Performance: A Deeper Dive | p. 39 |
Horizon: The Fallacy of the Three-Year Track Record | p. 40 |
Performance Analysis: Practically Speaking | p. 45 |
Top-down and Bottom-up Approach to Determining Performance | p. 48 |
Designing Your Rating System to Help Make the Difficult Decisions | p. 51 |
What Does the Performance Score Really Mean? | p. 53 |
Criticality: A Deeper Dive | p. 53 |
Merit Zones: Putting It All Together | p. 57 |
Communication of Performance and Criticality | p. 59 |
Values and Compensation | p. 64 |
Conclusion | p. 67 |
Investment Philosophy and Process: A Lofty Cathedral Needs a Deep Foundation | p. 69 |
The Importance of Investment Philosophy and Process in Investment Organizations | p. 69 |
Investment Philosophy: Core Beliefs | p. 70 |
Investment Process: Control and Anarchy | p. 73 |
Avoiding the Pitfalls of Behavioral Biases | p. 78 |
Conclusion | p. 83 |
Investment Process in an Evolving World | p. 85 |
Implementation Overview: The "How" of the Investment Process | p. 86 |
Fundamental Valuation | p. 88 |
Market Behavior and How It Challenges the Fundamental Investor | p. 90 |
Team Behavior: Lessons for the CIO from Jelly Beans and Freud | p. 118 |
Portfolio Design | p. 127 |
Conclusion | p. 129 |
Communication for Superior Client Outcomes | p. 131 |
The Problem: Human Nature | p. 133 |
A Classic Tale | p. 134 |
Individual Investors, the Impact of Performance Chasing | p. 137 |
Are Institutional Investors the "Smart Money?" | p. 137 |
The Reality of Investing in Equities | p. 139 |
The Mathematics of Recovery | p. 142 |
Dilemma: Investment Firm or Distribution Shop? | p. 143 |
The Importance of Culture | p. 145 |
Sales and Marketing in an Investment Firm | p. 146 |
Conclusion | p. 149 |
Appendix: Client Communication in Extreme Market Conditions | p. 149 |
Where are the Clients' Yachts?: Reasonable Fee Structures | p. 159 |
The "Gamma Trade" | p. 161 |
Anatomy of a Blowup | p. 167 |
Catch 22 | p. 168 |
Faults of Existing Fee Structures | p. 170 |
Our Recommendation: High Integrity Fee Structures | p. 178 |
Conclusion | p. 186 |
Final Thoughts | p. 187 |
Characteristics of Great Asset Management Firms | p. 188 |
It Starts with a Shared Mission and Values | p. 188 |
True Meritocracy | p. 189 |
Avoiding the Pitfalls | p. 190 |
For Successful Client Outcomes: Communicate, Communicate, Communicate | p. 192 |
It's All about Incentives | p. 193 |
Integrity | p. 193 |
Notes | p. 195 |
Bibliography | p. 201 |
About the Authors | p. 205 |
Index | p. 207 |
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