In a real world when fund is closed portfolio manager is fired. Not here. New master of the universe failed three times and his comp only increased. Millions in comp despite multiple fails. Ask yourself, If he failed thrice what does he know about the business. So he hires. One dimwit making millions hired another dimwit making millions. Any board worth its salt would hire a law firm to find out why annual reviews were doctored allowing new master of the universe to be paid millions despite failures. Good question to ask is who knew it and when did they know it. Every executive has clawback clauses in their contracts. The board has to get what was overpaid back.
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MoA should fire all Capital Management employees and instead replace them with subscriptions to: Seeking Alpha Quant; Chaikin Analytics, Louis Navaillier, and Valueline. By using AI and Quants, they will increase returns on funds by 1/2 percent to 1% each year. They could have a monkey enter the picks into the computers and save $10m a year getting rid of Capital Management meanwhile generating excess $10M in revenue with better fund performance. Now that would be great decision making.
SEEKING ALPHA BABY !
Seeking Alpha. If MoA Braintrust really had a Brain, they would farm out almost all of their Capital Management Division to best-in-class portfolio managers to get the best possible returns on the sleeve of investment in each proprietary fund. With AI and Quant there is no reason why the gross returns on the funds can't be .5% better each year. By eliminating 50% of the Cap Man area, MoA would not only save millions In employee costs but potentially generate the higher Alpha it needs on its investments. We it would be a win / win and The Firm could almost eliminate and insulate itself against any future $60M Bond Impairments like it happened a few years back. It is embarrassing going into client meetings and they ask: "when is the last time MoA fired its own fund manager?" With the answer being 10 years ago. It makes the field reps and clients squirm. Steve Rich needs to do the right thing and farm out over 50% of Cap Mgmt to reduce costs and generate Alpha !