Some of you found hedge funds interesting, not worth the cost, in need of regulation, play an important role, manager pay is right on if the market accepts it, pay is too high, not easily replicable, how do they do it, Warren Buffett argues sub-par performance, what’s all the fuss… There has clearly been a push back on hedge funds, including some by pension funds that are demanding fee changes. The 2/20 management and performance fees are being pushed down by recent investor requirements that funds exceed high water marks, payment on performance fees only for returns that exceed Libor plus the fund’s management fee, and decreasing management fees as the size of an investor’s allocation to the fund grows. These changes will help in realigning the fee structure and perhaps increase net returns, while some hedge funds are shutting down (see the attached recent article “Quitting while they’re behind…” and tongue in cheek article on “The lexicon of hedge funds…”
Many of you expressed some agreement with the idea of borderless investing, while others had some reservations. Related to this borderless investing approach, there has also been an explosion of country ETFs (exchange-traded funds). According to BlackRock (a financial firm quoted recently in the Economist), late 2000 year-end ETF assets under management topped the $1 trillion mark for the first time — whereas the industry’s assets were just $40 billion at the end of the late 1990’s. Emerging markets and commodities were among the fastest-growing ETF types in the late 2000s.
Our focus until now has been on financial products and markets, but there are clearly other forms of capital. The attached article, “A question of trust” discusses the role of “social capital.” It is clear that social capital matters on several dimensions. While the attached social capital article is from some years ago, is “social capital” important in business and capital markets? Do you have any insights in this regard from your personal or professional experience? I hope you have a great Thanksgiving later this week
nd what motivates each individual and implement policies to obtain maximum performance from a group. The importance of the leaders role in motivating individuals is highlighted in Herzberg’s Two Factor theory. The theory highlights factors that must be in place to avoid dissatisfaction, hygiene factors, and factors that promote satisfaction, motivation factors, shown in Figure 4 (Pettinger, 2007). Herzberg’s theory helps to decipher what motivates individuals, but does not advise on how to implement this to produce maximum productivity from an individual, this is achieved by using the theory in conjunction with other motivational theories such as goal setting theory. Figure 4: Hygiene and Motivating Factors (Pettinger,, 2006) Goal setting is not just an important part of motivation, they are essential for both teamwork and successful leadership, they provide indication on what must be achieved, how much effort they must devoted to achieve it and they act as the primary source of job motivation for individuals, therefore setting them accurately is essential (Pettinger 2007). Specific and clear goals are the most effective motivators, and will lead to optimum performance, therefore it becomes essential for a leader to understand what motivates each individual within a group (Pettinger, 2007). Motivation is highly personal, and can differ massively across a group, so the leader must adapt how they motivate to suit each individual, this highlights the need for an organisation to implement policies that allow leaders to be flexible in how they reward individuals. Issues arise when goals are not set well, if the goals are ambiguous, unachievable or too easy then the individual will lose motivation (Pettinger, 2007). Once goals have been set it becomes essential for leaders to regularly assess how individuals are progressing towards them, if well then goals should be made more challenging, if they are struggling then the goals should be made easier. Goals also allow for leader to assess how the team are performing, and how their leadership style is functioning with the group, if goals are not being met the leader must adapt how the team interact together or their leadership style to achieve them. Conclusions The theories discussed provide a framework for understanding teamwork, leadership and motivation, however often are only applicable to distinct situations so do not translate sufficiently into practice and should be used cautiously. Clear connections and codependency exist between the theories, and ultimately in practice becomes the responsibility of the leader to intertwine them to achieve maximum performance from a gro>GET ANSWER