Why every manager must report honestly about capacity

Q&A

James Spence of Cerno Capital discusses the recent Japan equity rally and the cult of the star manager.

Have we begun to see a ‘great rotation’ out of bonds and into equities? We look at the rotation debate with wry amusement. It seems there are allocators who are selling bonds and buying equities, like insurance and endowment allocators. But on the other hand, it is not as if bonds are done for, because they are still in demand among actuarial managers. We see that equities are more attractive, but we know insurance companies are lightly allocated, and at the end of that we may need to take another look at valuations, because equities could be pricey in relation to a sub-par economic r...