Anita Nassar is a household name in asset management and her stint at Chicago-based hedge fund Citadel included the GFC years. Her numerous accolades, from Rising Star of the Hedge Fund Industry to her inclusion in the 100 Most Influential Women in European Finance, reflect her fierce desire to change the asset management industry, and to a greater extent, the world.
A committed philanthropist, Ms. Nassar is also co-founder of the charity Teach for Lebanon, which aims to give underprivileged children and refugees of the ongoing civil war the chance of an education and, in her own words, “reversing their destinies”. Her latest business venture, a new consultancy which she founded and spearheads – Alternative Consultant Group – brands itself as a ‘disruptive approach to consulting’ and focuses on business strategies for asset managers. This, she says, is an area which needs the most shaking up, moving from a product-centric approach to a robust top to bottom client culture.
Asia Asset Management (AAM) caught up with the industry maven recently, and here, she shares her philosophy as an asset manager, the importance of creating a client-centric culture, and her predictions for the future.
AAM: With your new consultancy, do you see a need to re-invent the asset management industry?
Anita Nassar: A long-term business strategy puts the client at the centre stage of the organisation. This is easier said than done as it requires a strong top to bottom client culture, with a focus on listening and anticipating the clients’ needs. This is what is missing in the asset management industry at the moment. Take Amazon for instance. Its success in the retail business is credit to the way it treats its customers – always putting them first, ensuring top quality service and making them feel safe when buying from Amazon. The same applies to investing – you have to feel safe when you’re investing with an asset manager. As an asset manager, you have to gain your clients’ trust and partner with them and move away from being just commercial and transactional; that’s what I’m trying to incorporate in my consultancy businesses. As Steve Jobs said: “Get closer than ever to your clients, so close that you tell them what they need well before they realise it.”
How is technology influencing the asset management industry?
Technology will make the industry much more transparent. These days, clients have access to a whole suite of information, including websites that allow you to compare returns. I think the future lies in creating an ecosystem where the client is placed at the heart of it all, and client service will be crucial in an asset manager’s success. Soon, I believe, clients will be the ones rating asset managers, as technology will enable everyone to see which asset managers are best or worst in terms of their client service ratings. As asset managers, we have to move from being reactive to proactive. That’s how I’m trying to educate my clients. And asset managers who don’t focus on clients will see their assets suffer in today’s increasingly transparent world. Currently there are such ratings, but they will not be confidential for long!
Your work has taken you across the world, working with different types of institutions and set-ups. What challenges are unique to working with government institutions versus corporates?
Government institutions are focused on long term versus short term returns, and governments allocate external asset managers to access the smartest macro, equity and commodities investors. Because they generally have a large amount of money to invest across a wide array of asset classes, as an asset manager, you can’t just sell them a product. You have to build a relationship across all layers of the government organisation across all asset classes, and provide them with value-added service such as market intelligence. It has to be a rewarding relationship that doesn’t only focus on returns, because when times are bad-- and trust me, there will be bad times in the market--they will appreciate the good service they receive across different areas. The asset manager should provide training to the government institution staff and expand the coverage map across all departments in order to ensure they are seen as a partner across (the entire) organisation.
What strategy should asset managers take in times of financial crisis, and what were their previous missteps?
Beta combined with leverage was the main driver of the underperformance we saw in 2008. Unfortunately, the industry has a short memory, and it looks like we might be on our way to repeat the same mistakes again. One reason for this is because portfolio managers generally have a career lifecycle of seven to eight years, and at least 50% of the current portfolio managers were not investing in 2008.