By William (Bill) J. Kelly, CAIA, the President & CEO of the CAIA Association.
It was 120 years ago that a weekend carpenter named Thomas Lee created the original Adirondack Chair. As far as we know, this Mr. Lee had no apparent relation to the eponym of Thomas H. Lee Partners, but that invention would have made for one heck of a private investment. Anyway, the chair itself was designed for comfort and recline, allowing for “your troubles to melt away”, and why not? The halcyon days of the early 1900’s was a time when chairs were for lazing and nearby lakes were even named Placid. Today that chair might just need to be equipped with an airbag, a seatbelt, and/or an ejector-seat button, and that lake may just need a new name.
Welcome to the season of innovation where the “times get tough and the tough get innovative”, while the placid get crushed, and their recliner becomes a frog-boiling trap of career limiting proportions. A recent article by McKinsey & Company succinctly covers a five-practice plan to carpe-back-that-diem, and it is no surprise that the importance of discovering emerging adjacencies made the cut.
This has been part of the playbook of CAIA Association which has taken us from our founding curricula and exams in the institutional quality alternative investment space, to addressing the advent of alt-data, data sets, and the deployment of algos. This, in turn, led to the formation of our FDP Institute and a translation-based curriculum to allow for a cogent and integrated investment process where the data scientist, the CAIA/CFA Charterholder, and the learned PhD, now all sit shoulder-to-shoulder. More recently, the roots of democratized access to alternative investments continue to run sturdy and deep, resulting in our digital badge offerings under the UniFi by CAIA initiative. This will give the end investor and their advisor, an informed product entry point and a discerning eye toward due diligence, as they look to access a widening set of risk premia offerings.
These newer adjacencies at CAIA Association cover another important point under the five-point McKinsey plan, which is external partnership. A critical building block for both of our recent initiatives was to find the very best industry partners to provide input, advice, and guidance. Some of these organizations are commercial competitors with one another, but when we approached them with an ask that was wrapped in a desire to create independent education for the end client, there was no hesitation, and not a single firm turned us down. We remain tremendously grateful for their support.
Another anti-Adirondack mover named Greater Share caught our attention this week as well. While the news of their launch was well reported in the FT about a year ago, their external PE Partners and a growing NGO portfolio of investments focused on child-centered learning and literacy is both innovative and impressive.
We urge all industry partners to think more about innovation and partnership as the standing-in-place model will continue to have its Kodak moment. Those that have a big hammer will find that every consumer choice is no longer a simple nail. We must be careful about how, and to whom, we grant access at any price point or under any payment plan. Our industry can provide for truly outstanding careers and correspondingly lucrative levels of compensation and there is nothing wrong with that. Such a model is only sustainable, however, when those choosing to enter our industry understand the very sacred trust they must hold dear for their client — knowing it is their interests, which must always come first. If they don’t, perhaps those aspirants should just stay reclined in that Adirondack Chair and let nature take its course.
Seek education, diversity of both your portfolio and people, and know your risk tolerance. Investing is for the long term.
About the Author:
William (Bill) J. Kelly, CAIA is the President & CEO of the CAIA Association. Bill has been a frequent industry speaker, writer, and commentator on alternative investment topics around the world since taking the leadership role at the CAIA Association in January 2014.
Previously, Bill was the CEO of Boston Partners and one of seven founding partners of the predecessor firm, Boston Partners Asset Management which, prior to a majority interest being sold to Robeco Group in Rotterdam in 2002, was an employee-owned firm. Bill’s career in the institutional asset management space spans over 30 years where he gained extensive managerial experience through successive CFO, COO and CEO roles. In addition to his current role, Bill is a tireless advocate for shareholder protection and investor education and is currently the Chairman and lead independent director for the Boston Partners Trust Company. He has previously served as an independent director and audit committee chair for ’40 Act Mutual Funds and other financial services firms. He is also currently an Advisory Board Member of the Certified Investment Fund Director Institute which strives to bring the highest levels of professionalism and governance to independent fund directors around the world. A member of the board of the CAIA Association, Bill also represents CAIA in similar capacities via their global partnerships with other associations and global regulators. Bill began his career as an accountant with PwC and is a designated Audit Committee Financial Expert in accordance with SEC rules. Follow Bill Kelly on Twitter @CAIA_BillKelly