Is it All About AUM?
When looking at two mutual funds, say one has 10B AUM and one has 20AUM, is the bigger one necessarily a better place to work? Why would a fund with a strong track record voluntarily stay small? If the Research Team at both funds is about 25 people, will they be paid more at the one with more AUM? I know this is a high-level question, but when comparing Asset Managers, I feel as though the pedigree of the investment team dodes not seem to be correlated with AUM that closely.
Some fund managers are loyal to their strategy and understand that the bigger a fund becomes the harder it is to beat the market. Other funds only care about raking in the fees and grow as large as they can. If you look at the value guys at Sequioa they beat the market consistently yet closed their fund to new investors to stay true to the existing investors. Sometimes the decision not to grow says a lot about the culture of the firm and the values of the managers.
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