For The Greater Good: Investment Trends That Can Benefit, or Harm, Clients with John Taft

Rosemont Roundtable: Exploring the Business of Investment Management

Among the large philosophical questions facing our industry, the view of investment management as a business versus the view of investment management as a profession, much like law or medicine, is paramount. This viewpoint determines how strategic decisions are made, from growth and M&A to allocation of capital. And at the core, it determines how firms act as stewards of the capital they manage.

John Taft, Vice Chairman of Baird, joined Rosemont CEO Chas Burkhart on the newest episode of the Global Investment Leaders podcast to discuss how he views stewardship of capital and some industry trends that have the potential to serve as headwinds or tailwinds to society’s greater good and clients’ benefit.

Chief among these trends is the flurry of M&A activity over the last several years. On one hand, thoughtful acquisitions and inorganic growth have the potential to benefit clients, as is often the case when a team joins a larger organization that has broader access to investments, better systems, or a superior service model. On the other hand, a returns-driven approach to M&A is often the objective, which can result in short-term profitability taking precedence over long-term benefits for clients.

“The primary focus needs to be on what’s best for the client. Every time we’ve gotten away from that and focused on what’s good for management or shareholders, we have strayed from the core principle of stewardship and have gotten ourselves and society in trouble,” says Taft.

Another emerging trend that Taft believes is here to stay is the alignment of values with investment strategies. While Taft cites the lack of standardized measurement as a hurdle, he believes the increasing interest in impact and ESG factors will lead to greater good for both investors and society in general.