Thomas Friedman on alpha/beta separation
Jun 2nd, 2008 | Filed under: Portable Alpha & Alpha/Beta Separation
Watson Wyatt consultant Janet Rabovsky passes along an interesting observation from a recent Watson Wyatt global “research summit”, a biannual affair for those involved with manager research at the firm.
Apparently, Thomas Friedman’s seminal book “The World is Flat” has a lot to say about the current state of asset management. Writes Rabovsky:
“…Another key theme of Friedman’s book is the separation of value-adding activities from commoditized activities. He says: ‘more and more jobs will be broken apart, with the more sophisticated tasks being done in the developed world and the less sophisticated tasks being done in the developing world—where each has its comparative advantage.’ Many companies have already embarked along this path, including my own. Research is done in Uruguay and Bangalore (for North America and Asia respectively), while data processing is done in the Philippines and Mexico City.
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