Get Ready for Life After Benchmarks?
Melissa Shin of Benefits Canada reports, Get ready for a life after benchmarks : Benchmark-oriented active managers will fall behind. That’s what Yariv Itah, managing partner at Casey Quirk, argued at an Alternative Investment Management Association event in Toronto on Wednesday. A paper he co-wrote, Life After Benchmarks , says clients will soon care more about outcomes, such as specific cash-flow needs, than outperforming a benchmark. But “to get away from the benchmark, you need a lot of courage,” says Jean-Luc Gravel, executive vice-president of global equity markets at Caisse de dépôt et placement du Québec. That’s particularly the case in Canada, where we have fewer names to choose from. Even though clients will compare your performance to the benchmark over the long term, it can be dangerous to try beating it over the short term. For instance, when Nortel comprised 35% of the TSE 300 (now the S&P/TSX Composite Index), many managers Gravel spoke to knew it was ov