AsgardAsgard Investment Partners is a very large asset manager. It believes in investing in firms that have a strong business model and governance, reasonable valuations, solid capital structures with limited financial leverage, and above-average expected earnings growth for the next three years. Although the Asgard master fund invests in fewer than 125 securities, each sector analyst builds financial models that track as many as 50 firms. To support them in their task, analysts benefit from software developed by the Asgard research and technology group that provides access to detailed market and accounting information on 5,000 global firms, allowing for the calculation of many valuation and growth metrics and precise modeling of sources of cash-flow strengths and weaknesses within each business. Asgard analysts can also use the application to back-test strategies and build their own models to rank securities’ attractiveness according to their preferred characteristics. Security allocation is determined by a management team but depends heavily on a quantitative risk model developed by Asgard. Asgard has a low portfolio turnover.
Q. Which activist investing tactic is Asgard least likely to use?
A.Engaging with management by writing letters to management, calling for and explaining suggested changes, and participating in management discussions with analysts or meeting the management team privately
B.Launching legal proceedings against existing management for breach of fiduciary duties
C.Proposing restructuring of the balance sheet to better utilize capital and potentially initiate share buybacks or increase dividends
Solution
B is correct. Asgard invests in firms that have strong business models and good governance. Also, it approaches investing as a long-term investor looking to use its voice to improve the company’s asset management. Asgard is unlikely to use an aggressive posturing or to invest or stay invested in companies with weak governance or where managers may be in breach of fiduciary duties.
A is an incorrect answer. Engaging in positive conversations with management of companies with which Asgard has invested reflects a use of its voice to improve these companies’ long-term value.
C is an incorrect answer. Because Asgard is strong at modeling sources of cash flows and is known for investing in companies with a strong capital structure, it would be consistent for Asgard to propose ways to optimize the capital structure and shareholders’ compensation.
这题感觉还是挺模糊的，Asgard应该算是基本面量化的管理人吧，题目表述是用了model+backtesting去进行选股（rank securities’ attractiveness according to their preferred characteristics），这是很明显的rules-based的方式，怎么又考察说activist investing？感觉不是很严谨啊，实务中哪个量化管理人还会介入组合里的公司的运营去做个股的activist investing？
我最后是排除法选的A，Engaging with management by writing letters to management, calling for and explaining suggested changes, and participating in management discussions with analysts or meeting the management team privately，我的出发点是投了125个公司，还meet with team privately，这种workload根本不符合一个quant manager的投资方法。结果答案是B，我看别的解答里面说这种涉及到违法的行为不是股东能介入影响的，所以least likely选择这个，感觉题目出的不是很好。
