Winning at Active Management conducts an in-depth examination of crucial issues facing the investment management industry, and will be a valuable resource for asset managers, institutional consultants, managers of pension and endowment funds, and advisers to individual investors. Bill Priest, Steve Bleiberg and Mike Welhoelter all experienced investment professionals, consider the challenges of managing portfolios through complex markets, as well as managing the cultural and technological complexities of the investment business.
The book's initial section highlights the importance of culture within an investment firm - the characteristics of strong cultures, the imperatives of communication and support, and suggestions for leading firms through times of both adversity and prosperity.
It continues with a thorough discussion of active portfolio management for equities. The ongoing debate over active versus passive management is reviewed in detail, drawing on both financial theory and real-world investing results. The book also contrasts traditional methods of portfolio management, based on accounting metrics and price-earnings ratios, with Epoch Investment Partners' philosophy of investing on free cash flow and appropriate capital allocation.
Winning at Active Management closes with an inquiry into the crucial and growing role of technology in investing. The authors assert that the most effective portfolio strategies result from neither pure fundamental nor quantitative methods, but instead from thoughtful combinations of analyst and portfolio manager experience and skill with the speed and breadth of quantitative analysis. The authors illustrate the point with an example of an innovative Epoch equity strategy based on economic logic and judgment, but enabled by information technology.
Winning at Active Management also offers important insights into selecting active managers - the market cycle factors that have held back many managers' performance in recent years, and the difficulty of identifying those firms that truly possess investment skill. Drawing on behavioral economic theory and empirical research, the book makes a convincing case that many active investment managers can and do generate returns superior to those of the broad market.
Praise for winning at active management
"In this highly accessible book, Bill Priest and his co-authors do a masterful job demonstrating the critical components of success for any investment manager: maintaining the right culture, developing a rigorous and effective investment philosophy, and embracing technologies that can capture greater value from fundamental insights. Investors interested in improving their results will benefit from the five decades of wisdom and experience that are so engagingly captured here, and come away with profound insights about the active/passive debate, how both culture and technology are underappreciated drivers of success, and the future of investing. Bill's highly successful career as an investor, innovator, and industry leader give this work tremendous depth and perspective—I strongly recommend it."
— BLAKE GROSSMAN, Managing Partner, CHJ Capital Management; Chairman of the Board of Directors, Financial Engines; former Chief Executive Officer, Barclays Global Investors
"While having the right corporate culture is essential for successful asset management, culture is surprisingly under-researched in finance. Winning at Active Management is a bold step forward in filling this gap."
— CAMPBELL R. HARVEY, PHD, Professor of Finance, Duke University; co-author of Corporate Culture: Evidence from the Field
"Bill Priest and his co-authors expertly capture what's at stake in the debate about active versus passive investing. In Winning at Active Management, they identify the styles and traits in active management that outperform over the long term."
— FLEMING MEEKS, Executive Editor, Barron's
