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How to improve investment culture

Welcome to The Rec List, a weekly compilation of the best research notes, academic papers, articles and posts aimed at anyone who works in manager selection.

How to improve investment culture

NEW YORK - Athletes don’t get paid for the big bucks for giving snappy quotes. And that’s probably a good thing for them, or else there might be even more broke sports stars than the staggering number already out there.

But punching down on athletes is neither big nor clever and, in this instance, unfair. Take for example Steve Archibald.

Who? Good question. Archibald is a former soccer player for the likes of Tottenham Hotspurs and Barcelona who famously described team spirit as ‘an illusion glimpsed in the aftermath of victory.’

The quote is neat and while widely debated by sports fans, it is hard to disagree that team spirit is intangible. Coaches can put structures in place that they hope will engender it. They can try to recruit specific players that they believe might build it. But they can’t guarantee it nor indeed quantify its role in performance.

The same is broadly true for strong cultures on investment teams.

Portfolio managers and fund analysts set a lot of store on the culture of the team behind a given strategy, but whether it is good or not is very much a qualitative assessment by both parties.

Be that as it may, there are questions that analysts can ask to get a sense of a firm’s culture, as we previously covered here, and this Twitter thread covers nicely here. And there are steps – five to be precise – that asset managers and gatekeepers can take to create constructive cultures on their teams, according to a recent CFA article by Jim Ware entitled ‘Investment Firm Culture Change: Five Keys to Success.’

These are as follows:

Commitment from the Senior TeamProper diagnosis of the existing and preferred culture, resulting in a planBuy-in from employees plus a critical mass of “True Believers.”Execution of the plan / change management skills.Ongoing measurement of progress, via pulse surveys.

If it all sounds a little HR-y, well, it is. But stick with it as there are some good practical tips in there (such as writing a one-page culture statement and appointing ‘culture champions’ to help bring naysayers onside) and a nice case study of a European asset manager making the transition from a family office to offering strategies to external investors, and changing its culture along the way.

The first three of Ware’s points are – and I’m oversimplifying here – about analysis and planning. It is the fourth point – execution – that Ware says creates the most issues for firms. He writes:

This phase of culture change often creates resistance. It’s hard work and not always fun. Commitment is required. Without it, momentum can falter and the change effort evaporate.

This, he argues, is why measurement, and thus accountability, is essential for any investment team hoping to improve its culture and ultimately, one hopes, its results. Firms must set out a series of goals and benchmark them by surveying staff on a regular basis to see if progress is being made, he says.

Personally, a culture of constant surveys sounds like a 10th circle of hell, but maybe I’m just neatly demonstrating why so many firms fall down at step four as well as my unsuitability for the role of cultural champion. (I really hope my boss doesn’t read these newsletters.)

Joking aside, the topic of culture is pertinent at the moment with teams of portfolio managers and allocators largely disbanded and no video conferencing service yet to effectively recreate the camaraderie of the office. New hires (if there are any) will never have met their co-workers, an issue that is particularly challenging for recent college graduates starting their careers. And if Larry Fink, CEO of asset management’s all-conquering machine, is starting to worry about it, then perhaps we all should be.


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That’s it for this week. As ever, please send any links, thoughts, feedback and general miscellany to me at

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