The skills that today’s investment management firm leader’s must-have

News & Insights - August 22, 2021
Investment Management

The investment management industry increasingly demands more outstanding preparation from its leaders, motivated by the fact that the leading firms have agreed that professional performance must be accompanied by a series of personal and intellectual skills that enhance the manager’s role in question. This scenario has taken on a unique distinction as a result of the Covid-19.

The following are some of the characteristics that are most valued in today’s investment manager:

Strong analytical skills.

Today, sound economic reasoning and an excellent ability to see the big picture are required, including a healthy understanding of global macroeconomics and geopolitics.

While many financial specialists specialize in a particular country or region, they are increasingly expected to analyze the impact of events in one part of the world on other areas.

Higher oil prices, slowing U.S. growth, China’s role in the global economy, and financial linkages all have potentially significant global effects. Clients expect asset management firms to have an analysis that weighs these issues. In today’s world, we cannot afford to treat every country as if it were an island.

The emerging stereotype for the asset manager in the 21st century emphasizes both mathematical skills and economic reasoning skills. Firms want to hire professionals who demonstrate an interest in finance and who can think outside their specialties. Experts in engineering, mathematics, or physics are generally employed for groups that manage multiple assets or trading and risk management roles. The ability to work with data and models is of great importance.

Companies with a non-traditional management style may hire people with very diverse academic and professional backgrounds. They have become convinced that they all bring different skills because of their ability to evaluate different scenarios.

Knowledge management

Some analysts believe that financial mathematics programs are divorced from real-world events, resulting in professionals who can solve economic equations but lack the broader knowledge to link them to day-to-day affairs.

The financial crisis resulting from the pandemic event has created a demand for critical thinking, so) proper knowledge management would facilitate familiarity with it. Therefore, a professional who has developed interests in finance and history, political economy, philosophy, science, and even the arts have the tools to analyze theories and day-to-day events.

Strong communication skills

The ability to communicate and gain buy-in for one’s ideas is a crucial resource valued by asset management firms.

A significant part of an asset manager’s work with investors is clarity in communication. They must be able to convincingly explain the poor performance of an asset and have alternative plans to address the losses that the investment model may yield in each time frame.

Communication with colleagues within the same organization is also a highly valued resource in such competitive environments. It is sometimes difficult to overcome egos. Investment managers must have fluid communication channels with their peers, and at the same time, they must have the conviction to change their minds when presented with new facts or stronger arguments.

A professional without solid communication skills will easily fall prey to critical thinking, which leads them to reject valuable ideas poorly communicated. Broad knowledge helps to find compelling parallel scenarios, question positions and opinions objectively, and place them in a historical or scientific perspective that allows the most appropriate decisions to be made for the organization.

Information segmentation

Another highly valued quality in the asset management industry is the ability to reason, that is, to assimilate large amounts of information and to separate the accurate information from the noise through data analysis.

Sound macroeconomic reasoning requires the ability to see the big picture. That is why professionals in the sector need to master tools to analyze a problem analytically and mathematically.

Innovative thinking

Finally, and as a critical point, innovative thinking requires understanding, critiquing, and finding new angles to approach the problem at hand. For cultivating this skill, it is necessary to expose oneself to ideas that value and promote diversity of thought and perspectives.

The importance of challenging viewpoints, engaging in interdisciplinary work, appreciating different cultural approaches, and participating in detailed scenario building that focuses on baseline forecasts and outlier events enriches each manager’s actions when it comes time to provide solutions.

Asset management firms focus on developing their staff so that, in the future, they will boost the entire industry. It is not only about instilling in them an interest and passion for the financial markets; it is about providing each professional with a strong motivation, where self-confidence prevails, and teamwork is enriched.