What the institutional investors think

I have had the opportunity of speaking to institutional investors, that is funds’

managing companies or in general to people whose job is to select managers for

funds’ funds.

Here things become interesting because the manager's goal is to

select other managers able to do this for him or her, in order to satisfy a clientele

who will then be willing, too, to entrust them with their own savings and capital.

The war of the managers, in this case, is divided into two sides: one side is looking

for the best performance and the other is looking for the best product package.

You know that even managing is selling a product.

In this case, you should measure the quality of the product by its return over a

period of time, in proportion to risk.

The product package is important in every case: just think about the amount of

money that has been raised from the introduction of capital-guaranteed products

after the stock exchange crashes of 2001.

In this case the product’s success does not come from the performance promised,

but from the feeling of “safety” generated by the product.

Some years later you would have discovered that nothing was guaranteed by those

products, as the risk assumption made during subscription was based on bonds

issued by certain banks that wrote the history of finance and today do not even

have an official web site.
perform, or to

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