Investment Governance Blog

Above Average

Bank v RIA as Investment Advisor: A Cost-Benefit Analysis

Many investors ask, "Is it better to have a big bank (Goldman Sachs, for example) as my investment advisor or a Registered Investment Advisor (Bel Air, for example) to manage...
Above Average

Why the “Passive vs. Active” Investment Debate is the Wrong Issue

The investment industry is embroiled in a "great debate" concerning which investment philosophy is best: active vs. passive management. The debate concerns how the building blocks (asset classes) that make...
Employee Review

Investment Governance Best Practices for Business Managers (How to Watch the Hen House)

The Problem:  You are a business manager(1), and it is either explicitly or implicitly the case that you are responsible for monitoring the activities of the investment managers that have...
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Does Size Matter?

Do "big investors" have better investment results than “small investors”? Many business managers expect that their wealthy clients with large portfolios ($25m+) should have better returns because the clients have...
Duty to Balance Risk and Return

A Business Manager's Duty to Monitor the Risk and Return of their Clients' Investment Portfolios

The Problem: You are a business manager and it is either explicitly or implicitly the case that you are responsible for monitoring the activities of the investment managers that have...
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Trust But Verify: Do Private Equity and Hedge Funds Deliver Superior Risk-adjusted Returns?

For several decades, the investment industry has promoted the virtues of hedge funds and private equity funds for large instructional investors and ultra high net worth individuals. But over the...
Verify

ERISA 1104(a)(1)(B) re Duty to Prudently Delegate

A trustee has a duty to prudently invest the plan assets on behalf of the beneficiaries. However, few trustees actually take on this complex responsibility alone. In most cases the...
RiskApocalypse

UPIA §2(b) – Duty to Monitor Risk and Return

The Duty The preamble to the Uniform Prudent Investor Act notes, “The tradeoff in all investing between risk and return is identified as the fiduciary's central consideration.”  For most trustees...
RiskApocalypse

ERISA §1104(a)(1)(c): Duty to balance risk and return with Alternative Investments

Prudence not Prescience Trustees are required to make hard investment decisions. They are to take into consideration the risk of loss and the opportunity for gain associated with each particular...