Patience at a premium in volatile investment environment

Pressure on institutional investors driving industry short-termism

It is often said that patience, persistence and perspiration make an unbeatable combination for success, writes Paul Price, global head of distribution at Morgan Stanley Investment Management.

While the level of perspiration may not be well researched, much has been said about the patience and persistence of institutional investors; or sometimes the lack thereof. The pressure on institutional investors to perform is undeniable, and the low-rate environment has further pressed investors to increasingly return-chasing behaviour, instead of focusing on their long-term return needs. This has by default moved the industry towards short-termism, with quarterly performance comparisons and shorter hiring/firing cycles, rather than a truly long-term perspective. The return-chasin...