A woman’s view on the world of investments – Lilian Lerm

Portfolio managers need to realise when they were wrong

Why has the skill to choose the right asset manager become so important?

Given that the barriers to entry to becoming an asset manager have been reduced, sifting through the ever increasing universe to find talented managers is no longer a simple task. However, this is precisely where we believe our multi-manager proposition comes into play. We believe we have the skill to find these managers and to identify the next generation of truly skilled managers. Identifying those boutique managers with real skill requires great expertise and significant on-the-ground resources. Through in-depth research we believe that we are able to identify managers that are truly skilful.

Lilian Lerm
Head of Manager Research at Sanlam Investments Multi-management and Blue Ink Investments

What is the most important trait an asset manager needs to display?

The ability to identify when they are wrong and to put that into action by rectifying their mistakes. Given the general tendency of people to be overconfident (especially in our industry), there is much to be said for someone who can admit that they made a mistake and who is willing to make the necessary changes in order to ensure that the effect of the mistake is contained. This will contribute significantly to preserving alpha generation ability over time.

True or false? A portfolio manager’s fund resembles the personality of the manager.

How each person approaches life is not necessarily how they approach investments. To some extent personality does play a role, but a very conservative person might still be willing to take calculated risks. Therefore, as long as a portfolio manager is able to invest in line with their investment beliefs (i.e. philosophy) in a skilful manner and through a replicable process, the manager will be able to outperform the market over time.