Choosing a Fund Manager – The 5 Aces model

March 14th, 2018 | Tags: , | No Comments »

Charlie Munger suggests we follow Peter Kaufman’s 5 Aces model when choosing a Fund Manager

Peter Kaufman’s list to a pick  very exceptional money manager :
1.Total integrity
2.Actual deep, deep fluency in whatever you say you are going to do on behalf of the client
3.A fee structure that’s actually fair in both directions
4.An uncrowded investment space
5.A long runway (meaning that the manager is reasonably young in age)
“I should be completely trustworthy, have actual deep fluency in what I claim I’m going to do, adopt a fee structure that’s generally fair in both directions. I should seek an uncrowded space because as we all know in business, ‘where there’s mystery, there’s margin.’ What kind of margin are you going to have in a crowded space? And number five, many of you in here are very fortunate you get to check that box of having a long runway. Some of the best money managers in history only get four out of these five aces because they don’t qualify for number five.” say Kaufman


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