Investment management awards are a great way for professional investors to recognise the significant players in the investment fund management industry. Technology development and innovation had increased dramatically in the last decade and with each passing day investment management professionals are faced with the increasing complexity of managing an increasingly interconnected world. The increasing complexity of complex decisions that must be made by hundreds of professional investors has led to a shift in focus in investment management services. Investment management awards are now looking more towards the leadership role, as many companies now place a strong emphasis on management efficiency and implementation.
Investment management awards are used to reward those companies and individuals who have contributed the most to a company’s success through superior planning, execution and strategies. Investment management awards have a wide range of objectives. One objective is simply to recognise the most efficient managers and investors of a given asset class. Other objectives can include benchmarking, influencing investment management, improving internal functions and processes, improving productivity, identifying and eliminating obstacles to success and more. While all of these objectives are worthy, they often don’t receive as much attention as they need in the investment management sector due to egos and biases.
For example, during the recent financial crisis many companies lost large amounts of money and large numbers of financial executives lost their jobs. The overall economic situation made it difficult for any firm to get outside help to manage its business, and many firms simply turned to their internal teams to solve problems. As a result, these firms lost the competitive edge and their ability to attract and retain top talent was severely limited. These deficiencies in the financial crisis were highlighted at the World Congress of Business in Malaysia in 2021 when some of the biggest names in the financial sector came together to jointly present their case and put forward recommendations to help other firms overcome similar challenges.
Some years ago, awardees of these awards went on record stating that they would never again allow their competitors to dominate the investment process, as happened during the time of the great recession. This statement sparked a fierce debate within investment management circles, with some experts claiming that this was a ridiculous threat to the integrity of the investment process. Others pointed out that such competitors were merely using the fears of investors to fleece them of their wealth by making promises that they simply could not keep. Still others felt that the best way of dealing with these sorts of problems was simply to improve the quality of the research that firms used before coming up with their proposals.
After the global recession took hold in 2021, many of these problems faded into the past. Investors were no longer fearful of investment firms and their investments, as had been the case during the previous recession. Endowments, too, saw a decrease in their portfolio holdings, which peaked at almost eighty-five percent in 2021 before gradually dropping to around sixty percent today. While this is not a full recovery, it is encouraging to see the number of companies that are coming forward with their plans to improve the quality of their investments.
It is also encouraging to see the number of companies who are coming up with plans to improve the way that endowments and boards assess investment portfolios. While a few companies continue to use the very same system that they always have, many other firms are making significant improvements to their process. One of the biggest issues with endowments in the past was the subjective nature of the way that they evaluated portfolios. Many of the current changes, which attempt to eliminate bias by allowing for more neutral parties to review portfolios, are excellent progress. Unfortunately, there is no real way to guarantee that the conclusions of investment committees, or even individual investment managers, are based solely on objective facts. As such, it is impossible to tell whether the decisions of investment committees will improve the quality of portfolios overall or will prove to be mixed.
While there has been an increase in the number of articles written regarding these awards, much of the additional information is simply aimed at keeping existing customers and by providing a bit more background on the various awards. For customers, it is nice to hear that their preferred investment manager won an award. For investment managers, it is important to read about the various winners to gain a greater understanding of the criteria that were used to evaluate them. For shareholders, it is important to read additional articles in order to gain a greater understanding of the objectives of the entire management team. Finally, for the editorial staff of investment publications, it is always nice to learn that the editor was impressed by the work of the investment managers in question.
There are a number of financial publication that will feature additional articles on this topic, as well as additional information on the types of awards that have been issued in previous years. While there is nothing new in the form of an investment management awards, it is always interesting to read about the different winners of previous years. In addition, reading about the various categories of winners can provide additional information for those looking to invest in the stock market but who are not familiar with the types of strategies that are used to select investments.