RIA Valuation Insights

A weekly update on issues important to the Asset Management industry


Excuse Me, Flo? Inflows and Outflows Drive Disparity in Performance between Different Classes of Asset Managers

Immediately before ordering the Soup Du Jour and duping Sea Bass into picking up his lunch tab, Jim Carrey’s character in Dumb and Dumber, Lloyd Christmas, rudely accosts his waitress at the Truk-Stop Diner with this inexplicable reference to the early 1980s sitcom starring Polly Holliday as Florence Jean “Flo” Castleberry. Decades after the movie’s release in 1994, the market seems to be postulating the same question in pricing RIAs.

RIA Performance Metrics: Keep an Eye on Your Dashboard

A persistent truth about investment management is that no analyst ever saw a piece of information he or she didn’t want. Professional investors are, by their very nature, research hounds – digging deep into a prospective investment’s operating model, financials, competitive landscape, management biographies, and whatever else might be relevant to try to evaluate the relative merit of buying into one idea instead of another. This same diligence doesn’t always extend to practice management, though, and we are not infrequently surprised at how little attention management teams at RIAs devote to studying their own companies.

Lean on Me: Active Managers Combine to Stem the Tide of Fleeting Assets

Albeit unlikely that Bill Withers was alluding to the plight of active management in his 1972 hit solo, it does appear to be an apt descriptor for recent dealmaking in the RIA sector. Standard Life’s $4.7 billion purchase of Aberdeen Asset Management earlier this month follows shareholder pressure to right the ship after years of significant underperformance from both firms. The market seems less convinced.

An All-Terrain Clause for your RIA’s Buy-Sell Agreement

Clients writing new buy-sell agreements or re-writing existing ones frequently ask us how often they should have their RIA valued. Like most things in life, it depends. We usually recommend having a firm valued annually, and most of our clients usually do just that. “Usually,” though, is subject to many specific considerations.

Looking through the Buffett Brouhaha: The Oracle Still Believes in Human Innovation

Since I gave up politics for Lent this year, I’ve had more time to keep up with the deeper recesses of the financial press, which led me to Warren Buffett’s annual letter to the shareholders of Berkshire Hathaway. Buffett’s prose is a literary genre unto itself; a remarkably plain-spoken approach to making even the most complex and dull aspects of investment management simple and entertaining. If all “management letters” were penned as well, shareholders might actually read them. Perhaps that’s why they aren’t.

1 2 3 4 5 21