At a high level, the finance industry features a prevalent, entrenched, but reductive career trajectory.
In essence, graduates from “Tier 1 colleges” typically enter investment banking or join renowned firms like Morgan Stanley or Goldman Sachs in stock or bond research roles. After a few years, they transition to larger asset managers as junior portfolio managers, eventually earning recognition as scions of these firms. This becomes their brand in a sense, attracting investment dollars—they become a “Fidelity person” or “Wellington person,” etc. This established pipeline, while beneficial for talent flow, severely limits opportunities for those outside it.
At Crewcial Partners, we've taken a different approach to sourcing by opening our doors to more diverse talent, regardless of their background in this traditional, artificially constrained pipeline. However, our approval process for all managers remains equally stringent. With fewer than 200 approved managers on our list, each must offer a unique value proposition and demonstrate the ability to outperform. Fundamental aspects like portfolio concentration and a grounded investment process are essential touchstones, while storytelling and communication skills are also notable aspects to which we pay close attention, typically setting the great managers apart from the merely good.
We generally believe in focused portfolios because they tend to facilitate outperformance by better leveraging existing expertise and decision-making prowess. By extension, our grounding of investment decisions in fundamentals allows us to navigate periods of underperformance more effectively; when a manager's model is rooted in fundamentals, we can assess the situation objectively and strategize accordingly, even during volatile times that could otherwise trigger adversely emotional decision-making.
Ultimately, our gating factors revolve around identifying managers who align with our investment philosophy and can weather market fluctuations with demonstrably sound decision-making. This selective approach ensures that we maintain the integrity of our roster of approved investment strategies without an over-reliance on founder pedigree to deliver sustainable value to our stakeholders over the long term.