Insight into the process used by institutional asset allocator, the MIT Investment Management company. Some highlights I found interesting:
- They look for younger emerging managers and focus on their process over quantitative returns.
- Looking for evidence of those ‘buzzwords’ like discipline and patience. Example being identifying great business and waiting four years to invest.
- Turning away capital
- LT business planning
- Incentives aligned with shareholders. In one case, paying expenses instead of flat management fee
- An environment that fosters ‘buzzwords’ like discipline, patience, etc
- Generalists for the most part but invests in specialists when needed.
Worth a read! Unfortunately these guys are probably in the minority of asset allocators. If the goal is to have a successful asset management business, it likely comes back to raising assets and sales/marketing.