“The one thing I know for sure is that change will be constant,” Jeff Ringdahl, President and COO at Resolute Investment Managers told Nicsa members during a panel discussion at the 2020 Strategic Leadership Forum in February.
The conversation, which was moderated by Paul Kraft, US Mutual Fund and Investment Adviser Practice Leader at Deloitte & Touche LLP, and also featured leaders from Thornburg Investment Management and the Nicsa Diversity Project North America — was centered on growing, running, and serving the asset management business.
“At the end of the day, we are trying to attract the best and brightest managers and market our strategies back out to our clients,” Ringdahl said. “The other part of the business — running it operationally — changes so rapidly that we have to depend on outside firms to accomplish our goals.”
Jylanne Dunne, Vice President of Nicsa’s Diversity Project, agreed, adding that firms can take a gradual approach to determining their next step.
“You can be running your day-to-day business while also looking ahead,” she said. “What I’ve seen work for firms is the business lab approach: Taking a small group of people and testing out different strategies, outsourcing partnerships, and technology.”
Jason Brady, CEO of Thornburg Investment Management, said that such strategies are critical in an industry that isn’t always nimble.
“The investment management portion of this industry is like shipbuilding,” he said. “But elsewhere in the business, there’s such an opportunity to try things that could add value. There is so much room to change, and change quickly.”
Dunne said that improving Diversity and Inclusion in the global asset management industry is critical to that change.
“People are thinking about investing, and we see this in ESG investing for example, the same way they think about their food,” she said. “When they go to a farm-to-table restaurant, they feel very strongly about where that food came from. They want to know if it’s organic, that animals weren’t harmed, and that it tastes delicious. They feel the same way with ESG investments — they feel personally attached to it. This is a trend that is likely expand deeper into investor choices and it underscores the importance of viewing D&I through a 'business critical' lens.”
Ringdahl said his company recently invested a custom direct indexer with a significant ESG component.
“They ultimately provide a menu of causes that people can invest in,” he said. “The client and the advisor can customize the portfolio, which is important because ESG at its heart is a very personal thing for people — they don’t just want to take something off the shelf. Custom direct indexing will be a disruptor of ETFs.”
Finally, Brady also spoke to the opportunity in China’s asset management industry.
“The mistake people make is trying to replicate their business in China and say, ‘I’m a global asset manager, so I’m just going to place my capabilities in this context, and people will come to me,’” he said. “The correct strategy is adapting to the environment that you’re in.”
Note: Although the observations contained in this work represent the best thoughts of the individuals comprising the Nicsa panel, they do not necessarily reflect the views of Nicsa or any of its member organizations. Matters addressed in this work may touch upon legal or regulatory matters, however nothing herein is intended to be or should be construed as legal advice. You should contact your own counsel in order to obtain legal advice regarding these or any other matters.