Think, act and train

Think before you act. This phrase, often repeated in all walks of life, rings particularly true in the finance industry and, especially, in performance measurement.

Like most monetary professionals, performance measurers have to answer to someone and when those answers mean millions of pounds then it is even more crucial to be mindful of the analysis put forth. Because their stock is rising in the investment management arena, Trevor Persaud of Prudential Singapore stresses it is time to see the executive give more support to the intelligence business component, of which the performance function is definitely a part.

In our cover story this issue (Bridging the Gap, page 10), Persaud outlines the industry’s desire for better attribution but explains that in order for this to become reality, firms are going to have to invest in their performance functions. At the same time, these teams are going to have to better structure themselves in order to effectively accomplish everything expected of them. From balancing value-add and operational effectiveness to pushing better use of performance data, all these elements need to be evaluated if there is a desire to move forward.

Speaking of corporate intelligence, Malcolm Smith of Inalytics offers an interesting insight this month into the world of behavioural finance in the article: Rewarding good behaviour (page 8). Smith’s analysis outlines the biases investment managers tend to make as a result of being simply human. He insists, however, that these mental nuances are solvable.

Making its debut in the pages of PMR this issue, At the Roundtable (page 20), sits down key figures in this industry and discusses the hottest topic of the moment. This issue, Carl Bacon and Anthony Howland come together to discuss the much-talked-about subject of Statpro’s acquisition of Performa.

Another new element to this issue is a training session, which is taught by performance guru Nick Rogers of Bank of New York Mellon (page 14). Rogers’ detailed step-by-step instruction should help analysts better understand the time weighted vs money weighted formula. And if you want to learn more, look on www.performancemeasurementreview.com for more exercises.

Also, our regular column’s return with Andrew Colin of Flametree Research discussing the pitfalls of over-engineering and Geoff Chasseur examining another adventurer in Life After PM (page 18).

Ultimately, this issue should definitely have you thinking. Enjoy.

Darren Friesen, Editor