, Columnist
There's an Ugly Side to Investment Beauty Contests
Institutions tend to hire managers with whom they already have personal connections, and clients are the losers.
No way to select an investment manager.
Photographer: LILLIAN SUWANRUMPHA/AFP/Getty Images
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Big institutional investors spend lots of time and money searching for fund managers to run investment mandates. Long competitions, usually overseen by actuarial consultants, culminate in “beauty contests” where a shortlist of between two and five prospective managers make their pitch personally, usually aided by copious Powerpoint.