With so many asset owners looking towards long-term investing, it is considered for funds managers to ask how their business models are aligned with those client aims, or not.
In this research paper, Geoff Warren, research director for the Centre for International Finance and Regulation looks at how investment management organisations might be built to successfully pursue long-term investing.
A variety of recommendations and suggestions are put forward that address four building blocks: organisational; incentives; investment approach; and discretion over trading.
A key message is the need to manage the principal-agency issues that occur across multi-layered operations, with the aim of building alignment with investing for the long run.
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Designing an investment organisation for the long-term