Isch: Tight stop-out limits cause PMs to play not to lose
Roberto Ish · Mark Sullivan and Roberto Isch – Hedge Fund Investing at Wellington (EP.427) · Jan 16, 2025 · at 35:48
Roberto Isch of Wellington Management explains why overly rigid stop-out limits distort portfolio manager incentives and risk-taking behavior.
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“When you start inching towards B, you start behaving differently. Instead of playing to win, you might just be playing not to lose. And as an allocator, when you have a PM that's doing that, you're probably not getting the process that you underwrote.”
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