Featured Blog

Markets as amplifiers of crises

The finance sector is widely recognised as an originator of periodic crises. What is less widely discussed is the unhelpful role that the finance sector can play in amplifying crises that emerge from entirely non-financial origins.

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Latest Blogs

Long-term investors using short-term strategies

Large institutional investors who claim to invest with a long horizon and who wish to be seen as champions of a socially responsible form of capitalism, may in fact be contributing to dysfunctional capital markets in which short-termism dominates long-term thinking.

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50 years of efficient market thinking

Fifty years on from its inception, the efficient markets hypothesis still exerts a powerful grip on investors. The widespread reliance on market cap indices as benchmarks for active manager success creates a pervasive tendency towards performance-chasing across the industry. Large asset owners have the power to change this dynamic by changing the way that they engage with and monitor their managers.

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Misdiagnosing the crisis of capitalism

Much of the commentary on the crisis of capitalism ignores the role of institutional investors in creating the conditions in which corporate short-termism can thrive. We argue that a greater focus on long-run value creation in the capital markets – instigated by long-horizon asset owners – could help restore trust in the financial system and deliver meaningful benefits to society.

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Looking less at the scoreboard

Traditional performance monitoring reports do more harm than good. They encourage an excessive focus on performance data and contribute to procyclicality in decision-making by asset owners and managers. Minor tweaks to the existing approach are unlikely to achieve very much. Instead, a more fundamental re-think is required.

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