Could investment consultants hold the key to rooting out institutional corruption?
Fri Jul 5, 2013
Harvard’s Youngdahl pinpoints flaws in the consulting/investor relationship, highlighting the folly of prediction-based choices
Analyses of the financial crisis of 2007 to 2009 and the
continuing effects of a difficult investing environment have
largely focused on factors such as the roles of failed and
complex financial products, inadequate credit-rating agencies
and ineffective government regulators.
But according to Jay Youngdahl, Network Fellow, Edmond J.
Safra Center for Ethics at Harvard University, and keynote at
the upcoming InvestHedge Forum, there is another key group of
actors in the financial landscape that until now has gone
nearly unexamined: the investment consultants.
In his most recent paper, entitled Investment Consultants
and Institutional Corruption, Youngdahl takes a closer look at
investment consultants as a breed in the US across all asset
classes - not just hedge funds - to highlight what he terms
The full paper can be downloaded from the Social Science
Research Network, but what follows are highlights of
Youngdahl's key themes.
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