asset_management   141

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When Charlie Munger Calls, Listen and Learn
Jan. 25, 2019 | WSJ | By Jason Zweig.

Mr. Munger was calling to say that he had read the novel Mr. Taylor was about to self-publish, “The Rebel Allocator.” He was “surprisingly engaged,” recalls Mr. Taylor, 37, who had sent the book to Mr. Munger without much hope the great investor would read it. Mr. Munger proceeded to reel off roughly 20 minutes of unsolicited, detailed advice, mostly about plot and character.

In an interview, Mr. Munger tells me he tends to “skim” or “at least give some cursory attention” to any book that mentions Berkshire Hathaway......“The Rebel Allocator” is the opposite of most business novels. Here, the rich capitalist isn’t an evil genius using genetic engineering to hijack the brains of newborn babies. Instead, he is a hero: an investing mastermind who regards allocating capital as a noble calling that improves other people’s lives.

In the novel, a business student named Nick is on a field trip with his MBA class when he meets a 77-year-old billionaire, Francis Xavier, a restaurant mogul also known as “the Rebel Allocator” and “the Wizard of Wichita.”

Blunt and bristly, with zero tolerance for stupidity, Mr. Xavier spouts proverbs and zingers. A mash-up of Mr. Munger and Mr. Buffett, he often invokes their ideas.

Taking a shine to Nick, Mr. Xavier asks him to write his biography. Like many young people today, Nick wonders if becoming a billionaire is inherently immoral when poverty is still widespread.

Mr. Xavier teaches Nick what separates great businesses from good and bad ones. He uses three drinking straws, labeled “cost,” “price” and “value,” to demonstrate: When a business can charge a higher price than its goods or services cost, the difference is profit. When the value its customers feel they get is greater than price, that difference is brand or pricing power—the ability to raise prices without losing customers.

As Mr. Xavier moves the straws around, Nick learns that investing decisions can make the world a better place: “Good capital allocation means doing more with less to create happier customers,” says Mr. Xavier. “Profit should be celebrated as a signal that an entrepreneur provided value while consuming the least amount of resources to do so.”
asset_management  Berkshire_Hathaway  books  capital_allocation  Charlie_Munger  fiction  intrinsic_value  investing  investors  Jason_Zweig  novels  Warren_Buffet 
7 weeks ago by jerryking
Taking the helm: why asset management bosses are getting the top jobs
September 1, 2018 | Financial Times | by Owen Walker.

The journey to the top of a global finance company is straightforward if recent hires are anything to go by: simply take over the asset management division, launch profitable products, open up new markets and wait for the chief executive role to become available.
asset_management  finance  financial_services  investment_management  leaders  money_management 
september 2018 by jerryking
The quant factories producing the fund managers of tomorrow
Jennifer Thompson in London JUNE 2, 2018

The wealth of nations and individuals is ever more likely to be influenced by computer algorithms as investors look to computer-powered quantitative trading strategies to generate returns. But underpinning those machines and algorithms are real people, namely the world’s sharpest mathematicians and data scientists.

Though not hard to identify, virtually every industry — and especially Big Tech — is competing with the financial world for their skills....Competition for talent means the campuses of elite universities have become a favoured hunting ground for many groups, and that the very best students and early career academics can command staggering starting salaries should they join the investment world......The links asset managers foster with universities vary. In the UK, Oxford and Cambridge are home to dedicated institutes established and funded by investment managers. Although these were set up with a genuine desire to foster research in the field, with a nod to philanthropy, they are also proving to be an effective way to spotting future talent.

Connections between hedge funds and investment managers are less formalised on US campuses but are treated with no less importance.

Personal relationships are important,
mathematics  data_scientists  quants  quantitative  hedge_funds  algorithms  war_for_talent  asset_management  PhDs  WorldQuant  Big_Tech 
june 2018 by jerryking
AllianceBernstein’s Nashville move threatens New York and London
May 3, 2018 | Financial Times | Gillian Tett 10 HOURS AGO.

AllianceBernstein’s Nashville move is highly symbolic — and revealing — of the current state of finance. It highlights rising cost pressures on traditional asset managers, as investors abandon expensive, actively-run mutual funds for low-fee, passive trackers. The shift also shows how technological disruption is forcing top executives to rethink their assumptions. One obvious factor that has made it easier for a company such as AllianceBernstein to shift its physical headquarters is that the internet makes it possible to trade securities and do research anywhere in the world.

However, another, less-discussed, issue is that as financial services move into cyber space and the sector throws money at technology, companies also need to build digital facilities and hire computer technicians. That is tough to do in New York: competition for digital workers is high and it is hard to build cutting-edge computer hubs in densely packed historic buildings.

There is a third point about boardroom psychology: as executives toss those “d” words around — digital disruption — the conversations allow them to question all manner of taboos, including many that have nothing to do with computers. The idea of leaving a hallowed financial centre thus becomes easier to embrace, as costs keep rising in America’s coastal hubs.
Gillian_Tett  relocation  asset_management  cost_of_living  quality_of_life  Nashville  war_for_talent  digital_strategies  disruption 
may 2018 by jerryking
Al Gore: sustainability is history’s biggest investment opportunity
Owen Walker YESTERDAY

Fourteen years ago Mr Gore co-founded a sustainability-focused fund management company with David Blood, former head of Goldman Sachs Asset Management. Rather than the colourful “Blood & Gore Partners”, they named the business Generation Investment Management. The London-based group has since attracted $19bn in assets, managing money for institutional investors and affluent individuals, mainly in North America and Europe....Mr Gore has just given a presentation to UBS wealth advisers at the bank’s annual investment get-together. Unlike most of the PowerPoint-packed presentations, Mr Gore’s delivery is a glitzy affair, with dramatic theme music and video clips of crashing glaciers. His talk receives a standing ovation and he is mobbed for more selfies at the end....Generation lists large public sector investors among its clients, such as Calstrs, the $223bn Californian teachers’ pension plan, the $192bn New York State pension plan and the UK’s Environment Agency retirement fund. It also manages money for wealthy individuals but has stopped short of opening to retail investors. Almost all its assets are run in equity mandates, yet $1bn is invested in private equity
Al_Gore  sustainability  asset_management  institutional_investors  investors  green  climate_change 
april 2018 by jerryking
BlackRock co-founder warns on complacency over Chinese tech
Owen Walker in Davos 2 HOURS AGO

“Apple was not in the music industry, Google was not in the mobile phone industry and Amazon was not in the groceries business — until they were,” he said. “Tech companies are going to enter the financial services market in a very, very aggressive way.” 

Ant Financial’s sprawling portfolio of businesses includes one of the world’s biggest credit scoring systems, a bank, an insurer and a lending platform for small businesses. It was reported last week by the FT and other news organisations that Ant Financial is seeking to raise at least $9bn in its latest private fundraising ahead of an initial public offering....“You have to expect there will be a threat from [Chinese] technology companies to financial services,” ....“But I would say Amazon is equally a threat to doing that.” 
BlackRock  Ant_Financial  complacency  threats  disruption  Alibaba  asset_management  financial_services 
april 2018 by jerryking
BlackRock bulks up research into artificial intelligence
February 19, 2018 | FT | Robin Wigglesworth in New York and Chris Flood in London.

BlackRock is establishing a “BlackRock Lab for Artificial Intelligence” in Palo Alto, California.....The lab will “augment our current teams and accelerate our efforts to bring the benefits of these technologies to the entirety of the firm and to our clients”.....The asset management industry is particularly interested in the area, as they try to improve the performance of their fund managers, automate back-office functions to cut costs and enhance their client outreach by analysing vast amounts of internal and external data....\quantitative managers are “engaged in an arms race” as data analysis techniques that work today will not necessarily be relevant in five years.

“Big data offers a world of possibilities for generating alpha [market beating returns] but traditional techniques are not good enough to analyse the huge volumes of information involved,” .....The data centre is looking for another dozen or so hires for its launch, underlining the ravenous appetite among asset managers to snap up more quantitative analysts adept at trawling through data sets like credit card purchases, satellite imagery and social media for investment signals.
alpha  artificial_intelligence  asset_management  arms_race  automation  alternative_data  BlackRock  back-office  quantitative  Silicon_Valley 
february 2018 by jerryking
BlackRock’s Larry Fink Wants to Become the Next Warren Buffett
Feb. 7, 2018 | WSJ | By Sarah Krouse.

BlackRock’s new vehicle, known within the firm as a “long-term private capital” vehicle, is part of that push to emphasize alternative investments. The firm already manages $145 billion in higher-fee investment strategies that include private equity and hedge funds of funds, real assets and private credit. But it doesn’t have a buyout fund of its own.
BlackRock  Laurence_Fink  asset_management  Warren_Buffett  long-term  investors  investing 
february 2018 by jerryking
BlackRock bets on Aladdin as genie of growth
MAY 18, 2017 | FT | Attracta Mooney.

Aladdin, a technology system developed by BlackRock, the world’s largest asset manager, is also clever. It analyses the risks of investing in particular stocks, figures out where to sell bonds to get the best prices, and tracks those trades. And it is wily too, combing through huge data sets to find vital pieces of information for investors.....Launched in in 1988, when it was developed as an internal risk tool for BlackRock employees, Aladdin has become bigger, better and far more influential. It is now one of the best-known pieces of technology in the fund industry and is widely used by BlackRock’s rivals, including Deutsche Asset Management, the $733bn investment house, and Schroders, the UK’s largest listed fund manager.

But as Aladdin — which stands for Asset Liability and Debt and Derivatives Investment Network — has grown, concerns have mounted about its influence on markets. There are also questions about whether Aladdin can maintain or increase its hold on the asset management industry as rival technologies emerge.....with more and more investors using Aladdin, there are concerns about its impact on markets. The argument is that if trillions of dollars are being managed by people using the same risk system, those individuals may be more likely to make the same mistakes. i.e. Aladdin may increase systemic risk!!...Aladdin has a 9 per cent share of the 250 largest asset managers and a 15 per cent share of the insurance market, according to Credit Suisse, the Swiss bank. .......Many asset managers have recently begun the slow process of overhauling their technology systems after years of neglect. Previously, fund houses often had hundreds of different systems, but Aladdin and similar enterprise platforms allow businesses to cut out huge chunks of IT, reducing costs and jobs in the process.

At the same time, running money has become more complex and there is more regulatory scrutiny of investment decisions. This has meant that fund houses have been forced to assess how technology can help their investment processes.

“Money management is very tricky these days. Any tool that can help you with decisions is going to be highly in demand,”
........Under plans by Larry Fink, BlackRock’s chief executive, Aladdin will become an even more important source of cash for the fund giant. Mr Fink recently said that his goal is for Aladdin and the wider BlackRock solutions business to account for about 30 per cent of revenues in five years, compared with 7 per cent currently.......Even if there is a stumble in demand, BlackRock is already eyeing up other avenues for Aladdin.

In the past two years, it began promoting Aladdin, which comprises 25m lines of code, in the retail investment space, targeting wealth managers and brokers.

Last week, UBS Wealth Management Americas became the first wealth manager to say it will use Aladdin for risk management and portfolio construction......“Technology has always been a key differentiator for BlackRock. It is more essential to our business than ever before. We believe technology can transform our industry,” he said.

.......
Aladdin  asset_management  BlackRock  institutional_investors  Laurence_Fink  wealth_management  systemic_risks  order_management_system  algorithms  platforms 
january 2018 by jerryking
IT Asset Management Best Practices - BMC Blogs
When it comes to software license management, knowing what you are entitled to have deployed is often more important that what you actually have deployed. More often than not, organizations fail software audits for over-deployment because they can’t prove exactly what they have the right to have deployed. Sounds strange, I know. I guess it’s the proverbial “keep the receipt” thought process though. It’s worth it to have that one filing cabinet handy when software vendors come calling for a license true up.
asset_management  inventory 
june 2017 by mbraly
Meet the People’s Quant, an Ex-Marine Who Champions Value Investing - WSJ
By Chris Dieterich
June 2, 2017

Wesley Gray’s value-focused fund of overseas stocks is beating all its rivals over the past year. For him, it’s almost beside the point.

Mr. Gray, chief executive of asset manager Alpha Architect LP outside of Philadelphia, says watching short-term market moves doesn’t pay off. Instead, his firm focuses on the benefits of finding and buying a small number of very cheap stocks, and holding them through thick and thin.

Alpha Architect is an upstart active investment manager that tripled its assets last year, a noteworthy performance at a time when traditional stock pickers are struggling with lackluster performance and investor withdrawals. The firm, with $522 million in assets, is among a growing crop of money managers using academic financial and behavioral research, and algorithms, to identify stock bets likely to beat the market.

So-called quantitative investment strategies pulled from academic research have been around for years, popularized by the likes of Dimensional Fund Advisors and AQR Capital Management. Mr. Gray and Alpha Architect aim to deliver highly potent iterations to smaller investors.

Mr. Gray is a former captain in the U.S. Marine Corps who served a tour in Iraq, and later earned a Ph.D. in finance from the University of Chicago Booth School of Business. He says extreme discipline is a crucial component of his concentrated, algorithmic adaptations of classic value investing, popularized by Benjamin Graham and Warren Buffett.

Last year Mr. Gray put out a report, “Even God Would Get Fired as an Active Investor,” concluding that stock-picking foresight alone wouldn’t equip investors to conquer perhaps their most formidable foe: the fear-driven urge to cut losses.....the market is littered with winning strategies that lose their potency over time, and smart-sounding theories that fail outright when put into practice. Moreover, success in investing often leaves market-beating managers awash in fund inflows that quickly outstrip their capacity to generate ideas.

Mr. Gray responds that the research upon which his strategies are based have proved their resilience for years, and that they can be explained by investor behavior. He admits that he has considered the implications of getting too big, a state that he says isn’t imminent but could force unhappy changes on his firm.
alpha  investors  quants  USMC  PhDs  value_investing/investors  asset_management  algorithms  behavioural_economics  quantitative  idea_generation  finance  active_investing  stock_picking  investment_strategies  beat_the_market 
june 2017 by jerryking
BlackRock Bets on Robots to Improve Its Stock Picking - WSJ
By SARAH KROUSE
Updated March 28, 2017

The firm is offering its Main Street customers lower-cost quantitative stock funds that rely on data and computer systems to make predictions, an investment option previously available only to large institutional investors. Some existing funds will merge, get new investment mandates or close. The changes are the most significant attempt yet to rejuvenate a unit that has long lagged behind rivals in performance......The author of the company’s new strategy is former Canada Pension Plan Investment Board Chief Executive Mark Wiseman, who was hired last year to turn around the stock-picking business. The effort is the first test for Mr. Wiseman, viewed by some company observers as a potential successor to Chief Executive Laurence Fink......Many other firms that specialize in handpicking stocks are also struggling with low returns and shifting investor tastes. Since the 2008 financial crisis, clients across the money-management industry have moved hundreds of billions of dollars to lower-cost funds that track indexes, known as passive investment funds, instead of aiming to beat the market.
BlackRock  stock_picking  automation  layoffs  asset_management  institutional_investors  ETFs  Mark_Wiseman  Laurence_Fink  CPPIB  robotics  quantitative  active_investing  passive_investing  shifting_tastes  money_management  beat_the_market 
march 2017 by jerryking
Pimco’s Strategy for Life After Gross: Go Beyond ‘Bonds and Burgers’ - WSJ
By JUSTIN BAER
Updated Nov. 7, 2016

The 53-year-old Frenchman, who joined Pimco in the past week, intends to push it deeper into hedge funds, real-estate assets and other alternative investments, people familiar with the matter said. With interest rates in much of the developed world near zero, those kinds of investments are in demand from pensions, endowments and other clients. They are also among the types of funds that command higher fees.

Investing in bonds, loans and other forms of debt securities will remain Pimco’s focus, but Mr. Roman will aim to build out capabilities in areas ranging from private credit to quantitative investments based on computer models, the people said.....Pimco, a subsidiary of German insurer Allianz SE, believes the gradual shift into alternatives is its best bet to ride out what many industry executives expect will be a brutal shakeout for asset managers. Tepid returns and the surging popularity of cheaper investment options, including exchange-traded funds, have pressured managers to lower fees.
Pimco  CEOs  alternative_investments  asset_management  capabilities  money_management  ETFs  shakeouts  interest_rates  developed_countries  low-interest  developing_countries 
november 2016 by jerryking
At BlackRock, a Wall Street Rock Star’s $5 Trillion Comeback - The New York Times
SEPT. 15, 2016 | NYT | By LANDON THOMAS Jr.

(1) Laurence Fink: “If you think you know everything about our business, you are kidding yourself,” he said. “The biggest question we have to answer is: ‘Are we developing the right leaders?’” “Are you,” he asked, “prepared to be one of those leaders?”

(2) BlackRock was thriving because of its focus on low-risk, low-cost funds and the all-seeing wonders of Aladdin. BlackRock sees the future of finance as being rules-based, data-driven, systematic investment styles such as exchange-traded funds, which track a variety of stock and bond indexes or adhere to a set of financial rules. Fink believes that his algorithmic driven style will, over time, grow faster than the costlier “active investing” model in which individuals, not algorithms, make stock, bond and asset allocation decisions.

Most money management firms highlight their investment returns first, and risk controls second. BlackRock has taken a reverse approach: It believes that risk analysis, such as gauging how a security will trade if interest rates go up or down, improves investment results.

(3) BlackRock, along with central banks, sovereign wealth funds — have become the new arbiters of "flow.“ It is not about the flow of securities anymore, it is about the flow of information and indications of interest.”

(4) Asset Liability and Debt and Derivatives Investment Network (Aladdin), is BlackRock's big data-mining, risk-mitigation platform/framework. Aladdin is a network of code, trades, chat, algorithms and predictive models that on any given day can highlight vulnerabilities and opportunities connected to the trillions that BlackRock firm tracks — including the portion which belongs to outside firms that pay BlackRock a fee to have access to the platform. Aladdin stress-tests how securities will respond to certain situations (e.g. a sudden rise in interest rates or what happens in the event of a political surprise, like Donald J. Trump being elected president.)

In San Francisco, a team of equity analysts deploys data analysis to study the language that CEOs use during an earnings call. Unusually bearish this quarter, compared with last? If so, maybe the stock is a sell. “We have more information than anyone,” Mr. Fink said.
ETFs  Wall_Street  BlackRock  Laurence_Fink  asset_values  databases  scaling  scenario-planning  asset_management  traders  complacency  future  finance  Aladdin  risk-management  financiers  financial_services  central_banks  money_management  information_flows  volatility  economic_downturn  liquidity  bonds  platforms  frameworks  stress-tests  monitoring  CEOs  succession  risk-analysis  leadership  order_management_system  sovereign_wealth_funds  market_intelligence  intentionality  data_mining  collective_intelligence  risk-mitigation  rules-based  risks 
september 2016 by jerryking

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