Kochard: Manager underperformance is usually driven by operational or behavioral issues
Larry Kochard · Larry Kochard – Endowment Professor (Capital Allocators, EP.11) · Jun 12, 2017 · at 36:05
Larry Kochard, CIO of UVIMCO, discusses evaluating whether poor manager performance is due to bad luck or deeper organizational problems.
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“There's usually a correlation between bad performance And something else going awry. And so that's where it becomes a little more difficult in practice. There could be a situation where just bad luck that that concentrated portfolio produces a sort of an outlier negative return realization. But it could very well be that it's also correlated with other negative signs of the manager in terms of size, in terms of motivation, in terms of maybe they've increased their fees because they could, they've worsened the liquidity terms because they could.”
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