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By the Numbers: The Quest for Performance

by Patrick J. Schena, Eliot Kalter, Suzanne L. Duncan, and Nidhi V. Shandilya


Abstract

The Fletcher School at Tufts University and State Street’s Center for Applied Research have jointly released timely new research on the investment behavior and performance of institutional investors as we pass the 5 year mark since the collapse of Lehman and the onset of the Global Financial Crisis. The study - “By the Numbers: The Quest for Performance” - is the first in a series of joint publications to be released as part of a collaborative initiative, focusing on the most pressing issues of the global institutional investor community. Using empirical analysis, supplemented by survey reviews and manager interviews, the study isolates critical factors driving innovation in meeting the performance challenges of investors in the post-crisis world. The research traces the investment patterns of large institutional investors across an extensive asset profile diversified by geography and distinguished by a broad use of alternative assets and strategies. It finds that these patterns have expanded since the global financial crisis and are accompanied by heightened concerns about return volatility, a structural convergence of correlations between asset classes and the real risk of tail events. The study’s prescriptive conclusions have broad applicability across variety of asset owners and will be of interest not only to large institutions, but also foundations, small endowments, family offices and even high net worth individuals.


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