Myners calls for contrarian voice in asset management industry
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City Minister Lord Myners has berated the asset management industry for the absence of a strong contrarian voice saying it is one of the industry’s failings.
Speaking at the launch of the Asset Management Working Group’s paper at the London Business School today, Myners said everyone was guilty of being “momentum investors” and said the lack of contrarian views is a consequence of too much emphasis being placed on short-term performance as a measure of success.
He said: “I think one of the failures of investment management is the absence of a strong contrarian voice and I think that is a consequence of short-term performance measurement for that management.
“Tony Dye left UBS because he got it wrong, well in fact he didn’t get it wrong, he got it right, he just got it right too soon. And it seems to me that if you measure people’s performance over 90-day periods you run a continuing risk of people getting it wrong because you get extremes of valuation.”
He said the “world’s most admired investor”, Warren Buffet, would have been fired by UK pension trustees because at times he had three years of underperformance against the index.
He added: “I think the answer probably is that we need to take a much longer timeframe to evaluate the performance.”
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Readers' comments (1)
David Cowell | 9 Nov 2009 12:53 pm
Is it too soon to believe that, after 12 years in government, this lot have reached a conclusion which should,in 1997, have been blindingly obvious to someone with common sense rather than political ambition?
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