If thick German philosophy is your thing, then here is a thought for you: the history of the investment management industry is moving on a course satisfactorily expressed in the terms of Hegel’s dialectic. At the junction where traditional and alternative streams of activity are crashing together unfolds the untethered synthesis – the investment management industry of the foreseeable future.
Reading Hegel is an acquired taste most readily comparable to running ultra-marathons through the desert. If 5ks through the park are more your speed, one quick way into his thinking (and also easily oversimplified and misappropriated – alas) is the ‘Dialectic’ – the process through which an existing trend is disrupted by an emergent trend that was established in opposition. The eventual interaction of the two creates a third (new) trend that, while maintaining characteristics of the initial two, is unique.
Here’s a brief view of the dialectic of the history of investment management:
THESIS: The modern era of investment management kicked off in the 1950s with grand theories and methodologies that have been the bedrock for the traditional stream of the industry ever since.
ANTITHESIS: The post-modern era of investment management kicked off in the 1990s with the acceleration of alternative investing that established a counter stream of the industry. As the name suggests, alternative was defined precisely through its opposition to the established and traditional.
SYNTHESIS: We are in the early stages of the interweaving and redirecting of the two now established trends. This has been turbo-charged since 2008. It is taking place in the midst of the perfect storm of investment, distribution and regulatory developments. The framework for our understanding of these dynamics of traditional and alternative are being questioned. Everything is under a magnifying glass.
Propinquity is at the forefront of understanding the shifts taking place in investment management. Our goal is to help managers pivot their businesses forward, distill their investment capabilities to articulate what they do exceptionally well and position themselves for success in the evolving synthesis.