Article Abstract

It’s been over a decade since the introduction of analytics that effectively quantify manager skill. Yet there is little evidence that these enhanced metrics are being used by active equity managers, based on the general results of funds versus their benchmarks. Initially it was believed that most managers would eagerly adopt these enhanced analytics and learn to be more self-aware and improve. This belief proved to be overly optimistic. Hundreds of interviews with equity professionals indicates a second roadblock to the much needed turnaround across active management – this one being denial. And while resistance to change is perfectly understandable it is undermining the active management industry. The paper argues that both weak feedback and individual denial are co-contributors to the industry’s lackluster results.

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