At Behaviour Lab we drive performance by working with fund managers, asset allocators and institutional fund distribution teams to identify decision-making biases and the impact these have. We then work together to find solutions that limit negative effects.

We help research teams to identify unwanted variability in valuations of assets resulting from unconscious irrational behaviour. By working together to reduce this variance, teams can be consistent in their recommendations. To do this, we use a mix of automated processes to make decision-making processes more structured.

How We Work with Fund Managers

Markets aren’t perfect or rational, and neither are the humans that make them.  That’s not to say we never make rational decisions, in fact most of the time we do. But it is critical that we understand when our decisions are not rational and the effect this has.

Investors often make irrational decisions that significantly reduce performance, with biases affecting many high-value investments throughout the lifecycle of a fund.

Of course, awareness of our biases alone is not enough to overcome them.  What can make a difference are structured methods, which ensure that the decision-making process is robust and limits the effects of our biases.  This enables investors to capture the value that is left on the table.

We work with fund managers to identify their own specific decision-making biases, using advanced analytics and tailoring our debiasing methodologies to fit their investment philosophy, processes, personalities and corporate culture. In doing so, we help to establish sustainable change in decision making that drives performance where it counts.

Asset Management Advisor Board


Martin Huber

Senior Partner at McKinsey
Co-leads the firms Wealth and Asset Management Practice

Martin brings a depth of expertise of the asset management industry and extensive experience of helping drive behavioural change within leading global organizations across the financial industry. Since joining McKinsey in 1996, Martin has offered advisory support to financial-services and insurance companies across Asia, Europe, and the Middle East seeking to improve the performance of their investments.


Bryant Matthews

Global Director of Research, Credit Suisse, HOLT

Bryant plays a key role in the development of Holt, which provides an objective framework for comparing and valuing companies, giving an analytical view of over 20,000 companies worldwide and enabling investors to have confidence in their investment decisions.

During the last 20 years, Bryant has been working with world leading investors, helping them develop more objective and structured investment decisions that are underpinned by advanced analytical models.


Chris Lees

Senior Fund Manager at J O Hambro Capital Management Limited

With 30 years of experience in asset management, Chris is responsible for running global and international strategies at J O Hambro. Over the last 10 years Chris and his Co Fund Manager Nudgem Richayl have generated their investors cumulative returns of 169.9%, in comparison to their peer group composite returns of 144.6%.


Kathryn Graham

Trustee at Standards Board for Alternative Investments

Kathryn, was until recently the Head of Strategy Coordination at Universities Superannuation Scheme Ltd (USS), which operates one of the largest pension schemes in the UK.

In this role she was in charge of asset allocation and portfolio construction as well as the active risk budgeting process.

In addition to this, Kathryn is a trustee at Standards Board for Alternative Investments, and former Chair of the London Board for 100 Women in Finance.

 


Jason McQueen

Chairman and CEO of Alpha Strategies

Jason is a true pioneer in the in the risk management space. Prior to Alpha strategies he was the managing director and a founder of R-Squared Risk Management, which was acquired by Northfield Information Services.

Jason was the first to develop risk models for the British and Japanese equity markets, as well as the first multi-currency global asset allocation model and multi-factor stock selection models in both the US and Japan. More recently he has also developed FactSet’s multi-asset class risk model, (Everything Everywhere, “EE”) with extended coverage in order to focus on firm-wide risk compliance.

“We are already seeing the benefits from carrying out this study. By far the most valuable outcome of this detailed piece of work, was the ability to pinpoint two specific areas of improvement that had been simplified down to basic concepts with actionable remedies. The study clearly showed a desire to lock in profits too early and not let a full rerating occur when a company grows into its valuation. The last 2 years has been the perfect environment for the kind of investment and so that characteristic trait has been tested consistently throughout that period. The old me would have succumbed to the temptation time and time again as these investments climbed to new highs on a consistent basis. Companies such as Microsoft, Visa, ASML and Unitedhealth were classic candidates for my natural tendencies to take over and secure that euphoric high by locking in profits. However, the new me is now guided by helpful processes that enable me to counter these tendencies and where appropriate, bring in others to challenge properly and determine whether the decision has merit. There have been times where I have literally been sitting on my hands waiting for our processes to run their course and so I know it has clearly made a difference to my behaviour! I am convinced that my behaviour prior to this study would have resulted in more aggressive trimming of these names and hence made the challenge of coping with this market environment even more difficult. In a nutshell, this study has helped me stay in the game.”

– Fund Manager at a leading Global Asset Manager, running a Global Dividend Fund

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“The most important quality for an investor is temperament, not intellect.”
– Warren Buffett

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