Jim Bianco, Columnist

The Active Money Manager Model Is No Longer Viable

Successful investors will be defined by highly idiosyncratic and concentrated portfolios.

April 23, 2018 at 5:00 PM UTC

Jim Bianco is the President and founder of Bianco Research, a provider of data-driven insights into the global economy and financial markets. He may have a stake in the areas he writes about.

The game has changed.
Photographer: Carl Court/Getty Images

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A few years ago, investment blogger Michael Batnick posted a timeline of the great money managers since 1870. What was striking about the list of 67 was that only five were born after 1960: David Einhorn, Ken Griffin, Cliff Asness, Bill Ackman and Dan Loeb.

So why are no star investors under 50? The simple answer is that the financial crisis took a serious toll on the industry. Active managers have underperformed benchmarks for far too long in one of the greatest bull markets in history. As a result, they are losing assets to firms focused on low-cost, passive investing strategies, a shift that is shaking up markets in a not-necessarily-good way.