Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 14, 2023 erstellt
Beschreibung:
What is the most important driver of long-term investment returns? Many investors would point to asset allocation, which refers to the process of deciding which categories of assets to invest in. Some investors might point to portfolio implementation, which refers to the process of selecting specific assets within asset class categories. This paper argues that neither reflects the true foundation of investment performance, as portfolios are not allocated or implemented in vacuums. We argue an investor’s organizational capabilities determine what asset classes are investable and how investors can invest in them. This paper thus conceptualizes an investor’s set of organizational capabilities as its identity. While some have referred to this concept as a “Model” (e.g., Yale Model, Canadian Model, or Norwegian Model), the term "identity" avoids confusion associated with the numerous other models already at work in the investment business. Accordingly, an investor’s identity is akin to a sort-of “‘kitchen” in that it refers to the specific manner in which an investor “cooks up” its risk-adjusted net returns. Identity thus reflects the true foundations of long-term performance: namely, how an investor organizes its capabilities to allocate assets and implement portfolio strategies