How working flexibly can give investors an edge
Schroders’ new flexible working policy has been making the headlines. Our CIO explains why it is integral to providing superior investment performance.
I’ve always said that the question of how you create a high performing investment culture is inextricably linked with the individuals involved and how they interact with each other. This is a people business and this view has been at the heart of how we approach investment matters at Schroders.
As a leader of an investment team, I study charts and spreadsheets. But successful investment management is about much more. The real edge comes from understanding how to get the best out of each individual in my team ensuring that, through collaboration, the whole is greater than the sum of the parts.
Seeking to achieve behavioural advantages through an emphasis on accountability, the development of emerging talent and diversity of thought is an important part of how we improve our ability to achieve our clients’ investment objectives.
Like everybody else, Covid has had a major impact on our working arrangements and shown us that greater flexibility is possible thanks to technological innovation. As a result, we have reviewed our flexible working policy, extending it beyond prescriptive phrases, such as “you are entitled to work from home x days a week”.
We have taken a principles-based approach based on trust and pragmatism so that each investment desk may gauge what combination of working from home and in the office can maximise the productivity of the team.
In practice, our fund managers will be combining working from home with coming to the office. As with most things in life, extremes are rarely practical.
The benefits of working from home for a fund manager is that it may provide an environment which is more conducive to contemplation and original research.
Allowing that flexibility also allows us to attract a broader range of people, such as introverts or people who may have responsibilities at home, bolstering our ability to build diverse teams. Trust and flexibility also engender loyalty. The best investment teams are typically built by people who have worked together over a number of years.
Meeting in the office is also essential, however, as it enables us to get the best out of individuals’ collaboration with each other. Being a truly impactful investor requires interactions with other investors; we learn from and challenge each other.
The importance of developing our less-experienced team members must not be underestimated; a lot of their training is on the job, listening and eventually participating in ad hoc conversations on the desk.
The strength of our investment culture partly rests on our commitment to growing our own talent as well as hiring from outside the firm. We also know that the personal relationships we build in the good times help to build team resilience when we face difficult patches of investment performance. Finally, fulfilling our fiduciary responsibility does require oversight and this has to be conducted in person.
Our flexible working policy is a flexible answer to the question: “How do we make the best investment decisions on behalf of our clients?”
Our mission remains clear – to deliver superior investment performance. Understanding that there are many paths to delivering that performance is what has allowed our culture to stand the test of time.
Important Information:
This document is issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders). It is intended solely for wholesale clients (as defined under the Corporations Act 2001 (Cth)) and is not suitable for distribution to retail clients. This document does not contain and should not be taken as containing any financial product advice or financial product recommendations. This document does not take into consideration any recipient’s objectives, financial situation or needs. Before making any decision relating to a Schroders fund, you should obtain and read a copy of the product disclosure statement available at www.schroders.com.au or other relevant disclosure document for that fund and consider the appropriateness of the fund to your objectives, financial situation and needs. You should also refer to the target market determination for the fund at www.schroders.com.au. All investments carry risk, and the repayment of capital and performance in any of the funds named in this document are not guaranteed by Schroders or any company in the Schroders Group. The material contained in this document is not intended to provide, and should not be relied on for accounting, legal or tax advice. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this document. To the maximum extent permitted by law, Schroders, every company in the Schroders plc group, and their respective directors, officers, employees, consultants and agents exclude all liability (however arising) for any direct or indirect loss or damage that may be suffered by the recipient or any other person in connection with this document. Opinions, estimates and projections contained in this document reflect the opinions of the authors as at the date of this document and are subject to change without notice. “Forward-looking” information, such as forecasts or projections, are not guarantees of any future performance and there is no assurance that any forecast or projection will be realised. Past performance is not a reliable indicator of future performance. All references to securities, sectors, regions and/or countries are made for illustrative purposes only and are not to be construed as recommendations to buy, sell or hold. Telephone calls and other electronic communications with Schroders representatives may be recorded.
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