As head of research at AJO, Cesar Orosco, looked forward to learning more about investment management from the individuals he admired most in the academic world at the Investment Management Workshop (IMW). However, the relevant insights he gained exceeded his expectations and left him with a new perspective on the industry.
As a quantitative analyst in charge of a research operation, I lean heavily on academics. As a result, I was looking forward to hearing directly from individuals that I've read about and admired in the academic world. What stood out to me was how strongly all of the topics we studied were grounded in real-world examples. This seminar disproved the notion that all high-profile scholars live disconnected in an ivory tower. The case method of teaching coupled with the combined expertise of the faculty provided an enviable learning environment.
I also appreciated the quality dinner lectures from invited guests who are thought and industry leaders at the forefront of issues discussed in class. Talking about private equity? Invite Jonathan Lavine from Bain Capital. Discussing global equity valuation? Get Jeremy Grantham in the room. Wondering about the future on the asset management industry? Let's have dinner with Rob Kapito from BlackRock. Few programs are able to gather so many relevant industry leaders to share their knowledge with participants like the Investment Management Workshop (IMW).
I especially appreciated the emphasis on determining what driving themes would emerge over the next few years. These are not short-lived phenomena but actual meaningful trends with the potential to be transformational. Because these trends are discussed as theory before they become mainstream, attendees have an edge in their ongoing professional development. These forward-looking discussions provided us with ideas to process for the foreseeable future, whether examining the unprecedented global low interest rate environment, the rise of automated investment technologies for the masses, or new paradigms in asset allocation. The instructors do a great job motivating everyone to think about these issues as well as come up with insights of our own.
I have been a big fan of André Perold's work on a variety of topics, such as his contributions on transaction cost and implementation shortfall, which are a big focus in our firm. I was excited to attend his session and was fascinated by his take on a perennial question: What is the equity premium and—more profoundly—what does it really mean? His discussion on how long- vs. short-term views present a very different set of challenges to this question as it pertains to timing, allocation, and risk was illuminating, and the lingering questions of how a global environment with interest rates at historical lows might affect the basic premises of this concept resonated strongly with me. Because much of what I do depends on a competent assessment of value and equity pricing, this long-term view gave me a unique perspective.
I would stress that everyone will come out with something different, based on each individual's past experiences and interests. What I got from the program will certainly be different from what you do but will be just as valuable. You get back tenfold whatever you put in. At first one might fear that an open-ended discussion would lead to a chaotic learning outcome, but the professors know how to effectively drive the important points home. Likewise, they steer the discussions in a way that encourages a variety of opinions.
Given that I have a formal graduate education in economics and finance, I wasn't expecting to "learn" anything new on topics that have been exhaustively covered in the literature. But I was wrong—the instructors are very much in tune with the practitioner's side of things and are able to update the knowledge with relevant insights of what drives business today and will in the future. Learning something new and relevant about an important concept is very rare and immensely valuable!
