Four years earlier, in Beijing’s iconic “Bird’s Nest” stadium, a little-known Jamaican sprinter had gained worldwide attention by claiming the Men’s 100m and 200m gold medals in breathtaking fashion.
Such was his dominance in the 2008 Olympic 100m final, he could afford to slow down and beat his chest in triumph as he glided across the line.
In world record time.
In only his 13th 100m race.
Nobody had ever seen anything like it.
Now, on a humid August night in 2012, Usain Bolt puts a finger to his lips to silence the crowd and affords himself a smile as he lowers himself deliberately into the starting blocks.
He already holds both the 100m and 200m World Records. In the next few seconds, he could become the first man in history to successfully defend both Olympic titles.
“On your marks”
The crowd lean in.
“Set”
The starting pistol splits the tension.
They’re off first time - a wave of noise pushing them around the track.
Bolt surges ahead.
By the bend, he’s out clear in front.
Victory seems inevitable.
Then, suddenly, it doesn’t.
Bolt’s compatriot, Yohann Blake, explodes off the curve, streaking past the other challengers.
Blake is eating up Bolt’s lead.
Metre after metre.
Threatening to ruin the evening for 80,000 spectators.
Thirty metres from the line. Blake moves in for the kill.
Who will triumph?
Bolt shifts gears, finding a new burst of speed, and ends the challenge.
He nonchalantly crosses the line, his finger. once more on his lips. This time, he is silencing Blake.
For Bolt, victory was never really in doubt.
If I had asked you that night “Who is the World’s greatest male sprinter?”, you would have had no doubt.
Usain Bolt.
The fastest man on Earth.
But…
If I asked you “Who is the greatest fund manager?”
How would you respond?
It’s not the fastest.
Is it the portfolio manager with:
- The greatest absolute return? The greatest relative return?
- The highest Sharpe ratio? The highest Sortino ratio?
- Over a year? A market cycle? Three years? Five?
- In what context? Global stability? Crisis?
- Across all styles? Measured against similar styles?
There is no single, definitive measure.
Yet, many managers are driven by the desire to be acknowledged as the greatest.
Universally acknowledged.
They miss birthdays - sometimes even births.
They disappoint friends and family.
They will not stop.
Every day they roll that rock to the top.
They are obsessed.
So, when investors aren’t biting with the anticipated voracity, it’s hard for managers to see beyond performance.
One cannot simply switch an obsession “on” or “off”.
“How can we eke out another few basis points this month? Should I miss my niece’s wedding, or my husband’s birthday? Should I get to the office earlier? Stay later? Hire more analysts? Hire better analysts? Buy more data? Buy better data?”
Problem is, even if you manage to “solve” this problem, it’s unlikely investors will care.
What? How is that possible?
It all comes down to how sophisticated, “big-ticket” investors think about performance.
Once you sit above their risk-adjusted performance thresholds for a strategy, or an asset class, an extra basis point or 50 over the year isn’t going to change a single thing.
Don’t get me wrong. If you can add an extra five or ten percentage points to annual performance, you are going to get more attention. Can you do that, though?
The world’s biggest fund managers don’t manage the world’s best-performing funds. Rather, they manage the best-performing brands.
If you want to be more competitive, heed these words:
Investment performance is essential, but it’s no longer enough.
Once you are positioned in the peloton, stop wasting energy trying to move from 24th to 23rd.
Instead, invest 10% of that time, money, and energy into strengthening your brand.
Not only will you be more appealing to investors, but you’ll also make a better impression on potential hires and strengthen your bond with existing staff. For those in the private markets, you’ll fare better at the deal table, too.
Don’t be blinded by your obsession. Performance isn’t the only important factor.
Sometimes there are quicker, cheaper, more reliable solutions.
It starts with solving the right problem.
We’re here to help. If you need a hand, contact our IR and Marketing team.
