by Jagdeep Singh Bachher, Ashby H. B. Monk
In the aftermath of the financial crisis, institutional investors have become increasingly dissatisfied with traditional institutions of finance and investment, driven in part by high fees and poor returns, this as the number of institutional investors expands in geographic reach, well beyond the bounds of traditional financial centers.
As these investors reconsider their approach to deploying capital, many are making direct investments through in-house teams that bypass established financial intermediaries. Jagdeep Singh Bachher, of the Alberta Investment Management Co., and Ashby Monk, of Stanford University, examine the significant human resource challenges of establishing a world-class investment organization on what they refer to as the “frontiers of finance”.
In this white paper, they highlight how certain public pension and sovereign funds are attracting the necessary human resources. They focus, in particular, on the recruitment of the organization’s leaders, both current and future, within the investment departments.
In making their arguments, they draw on the findings of twelve in-depth case studies of public pension and sovereign funds conducted over the past 18 months around the world. While specific cases and findings are eschewed in favor of drawing useful generalization for the broader community of public investors, these do illustrate some of their principles and policies through a specific case study of the Alberta Investment Management Corporation.