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Investment Leadership and Portfolio Management: The Path to Successful Stewardship for Investment Firms


Praise for Investment Leadership and Portfolio Management

"This short book packs a lot of wisdom about portfolio management. It demonstrates the importance of firm culture and longer time horizons to successful investing, while putting forward a truly creative approach to performance fees."—Bob Pozen, Chairman, MFS Investment Management

"Singer and Fedorinchik have added an important book to the library of investment leaders. They drill deep into the question of product-driven vs. investment-driven firms, covering important foundational topics like vision, mission, culture, compensation, and fee structures. When serious practitioners like these three take the time to write about best practices, the result is a book that rings true. Full of practical ideas that are supported by a deep understanding of the underlying financial theories and lots of real-world, front-line experience. A must-read for all investment professionals who are committed to 'getting it right' in this post-crisis environment."—James Ware, CFA, author of High Performing Investment Teams, founder of Focus Consulting Group

"In an exceptional and decidedly unique style, Investment Leadership and Portfolio Management deserves special attention from any investor. The authors weave a wonderful mosaic of the investment management landscape that is both different from other investment books and compelling in its focus on the truly relevant issues. The case studies and references to actual experiences make this book an enjoyable read and, equally important, provide long-sought attention to the factors that really matter in the quest for investment performance."—Gary P. Brinson, President, GP Brinson Investments

"Singer and Fedorinchik have laid out a clear vision of the modern, post-crisis asset management firm in which the interests of the investment professionals, the firm and the end client are fully aligned. This book combines decades of practical experience with original insights from portfolio and behavior theory, in equal measures of wit and wisdom."—Donald M. Raymond, PhD, CFA, Senior Vice President, Public Market Investments, Canada Pension Plan Investment Board

BRIAN SINGER is Chief Investment Officer of Singer Partners and Chairman of the CFA Institute Board of Governors. Previously, he was head of global investment solutions at UBS Global Asset Management (formerly Brinson Partners, Inc.), responsible for asset allocation and currency strategies. Singer is also Emeritus Board Member of the Research Foundation of CFA Institute and an advisory board member of the Journal of Performance Measurement. He is a recipient of the 1991 Graham and Dodd Award and a 2001 recipient of the Dietz Award. Singer holds an MBA from the University of Chicago.

GREG FEDORINCHIK is head of investor solutions at Mesirow Advanced Strategies, Inc., an institutional fund of hedge funds firm based in Chicago. Prior to joining Mesirow, he was a senior strategist with the global investment solutions team at UBS Global Asset Management (formerly Brinson Partners, Inc.) and a member of the asset allocation and currency committee. Fedorinchik holds an MBA from the Kellogg School of Management, Northwestern University.



Chapter 1 Characteristics of Successful Asset Management Firms.

You Can Take the Boy Out of the Culture, but You Can't Take the Culture Out of the Boy.

Size Matters, but Not in the Way Most People Believe

Governance: The Guardian of an Investment-Driven Firm

Fostering Collaborative Freedom: Everybody is a Peer

Integrity: An Unquestionable Characteristic of Success


Chapter 2 Building a Cathedral: A Framework for Turning the Mission into Collective Action.

A Framework for Effective Leadership and Management.

Establishing and Living Organizational Values.

Creating Mission and/or Investment Philosophy Statements.

Strategic Goals and Key Performance Indicators.


Chapter 3 Building a Meritocracy:  Understanding, Evaluating and Rewarding Employee Contributions.

Performance: A Deeper Dive.

Horizon: The Fallacy of the Three Year Trade Record.

Performance Analysis: Practically Speaking.

Top-down and Bottom-up Approach to Determining Performance.

Designing Your Rating System to Help Make the Difficult Decisions.

What Does the Performance Score Really Mean?

Criticality: A Deeper Dive.

Merit Zones: Putting It All Together.

Communication of Performance and Criticality.

Values and Compensation.


Chapter 4 Investment Philosophy and Process:  A Lofty Cathedral Needs a Deep Foundation.

The Importance of Investment Philosophy and Process in Investment Organizations.

Investment Philosophy: Core Beliefs.

Investment Process: Control and Anarchy.

Avoiding the Pitfalls of Behavioral Biases.


Chapter 5 Investment Process in an Evolving World.

Implementation Overview: “The How” of the Investment Process.

Fundamental Valuation.

Market Behavior and How It Challenges the Fundamental Investor.

Team Behavior: Lessons for the CIO from Jelly Beans and Freud.

Portfolio Design.


Chapter 6 Communication for Superior Client Outcomes.

The Problem: Human Nature.

A Classic Tale.

Case 1: Individual Investors, the Impact of Performance Chasing.

Case 2: Are Institutional Investors the “Smart Money?”

The Reality of Investing in Equities.

The Mathematics of Recovery.

Dilemma: Investment Firm or Distribution Shop?

The Importance of Culture.

Sales and Marketing in an Investment Firm.


Appendix: Client Communication in Extreme Market Conditions.

Chapter 7 Where are the Clients' Yachts?: Reasonable Fee Structures.

The “Gamma Trade”.

Anatomy of a Blowup.

Catch 22.

Faults of Existing Fee Structures.

Our Recommendation: High Integrity Fee Structures.


Chapter 8 Final Thoughts.

Characteristics of Great Asset Management Firms.

It Starts With a Shared Mission and Values.

True Meritocracy.

Avoiding the Pitfalls.

For Successful Client Outcomes: Communicate, Communicate, Communicate.

It's All About Incentives.




About the Authors.