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Building a bench of data science-enabled investment talent

You would think that as a systematic investment house, the technology and systems would be far more critical than the people. But that is far from the truth. It’s the blend of both that ultimately determines the quality of the investment outcomes.

The importance of getting the mix right is highlighted in Accenture’s The Future of Asset Management report. It identifies the ability to blend the best mix of humans and technology as one of the most crucial determinants of success in investment management. 

In late 2020, Accenture surveyed 250 senior executives at asset management firms—including institutional, retail, alternative and hedge funds – to understand asset managers’ priorities better. It found that an overwhelming 95% of respondents saw an asset manager’s technology, data and digital capabilities as likely to be the key differentiators in 2025. However, many asset managers admitted they were still in the early stages of exploring and prototyping emerging technologies.

Prescient Investment Management (PIM) has been on a 23-year journey to build up its technology and data capabilities and get the balance between human and technology right to deliver on a business philosophy that aims to create simplicity and certainty in an uncertain world. 

As a systematic investor, portfolio managers take views informed by the evidence generated by our proprietary, data science-enabled investment platform. The investment approach is rational, rules and evidence-based and follows data-driven processes. This enables our investment professionals to make unbiased decisions and operate within clear and well-established processes and strategies. Together these have been proven to result in consistent long-term outperformance. 

Since joining PIM in mid-February 2018, the business has been on a growth journey. Our focus has been on building the bench of data science-enabled investment talent that the business needs to operate optimally.  As a result, we now have the optimal balance of diverse human skills and data science capabilities. 

BUILDING THE BENCH 

Prescient has always sought out young investment talent and then grown its own timber. It started when one of our founders, Herman Steyn, gave a lecture as part of the derivatives module at the University of Cape Town’s Commerce department in the formative years of business. He would invite the honours students to come and work on their thesis under his supervision at Prescient’s office. This carried on for many years. It was a win-win outcome for all parties: Herman and Guy Toms,  co-founder and current strategist, gave the students exposure to business, and Prescient benefited from the brightest young minds who brought fresh thinking and offered original insights to the investment process. This has often led to Prescient employing these young graduates, who, when they leave, go on to establish their own successful businesses.

Our approach to talent building has evolved somewhat, but we continue to believe in fostering the talent of young investment professionals. Our Chief Investment Officer, Bastian Teichgreeber, continues to encourage and drive initiatives with learning institutions. Our current talent bench-building activities include forging strategic relationships with universities and having our own Graduate Program within the Prescient Group. We are working on formalising a strategic relationship with one of the universities to employ master’s and PhD students at PIM while they complete their thesis. The skills we focus on include quantitative as well as data science. 

These areas align with Accenture’s research, which highlights how important it will be for asset managers to change their mindset regarding all aspects of their culture, ultimately blending people’s skills with technology and automation. This approach is already part of Prescient’s DNA, with data science and highly skilled investment professionals both fundamental drivers of our evidence-based systematic investment process. 

The report also noted that even the most advanced technologies are, in the end, just the raw materials and that supportive processes and organisational structures were required to encourage constant experimentation. It cited effective leadership as necessary to promote a culture of innovation, “where practical creativity is accepted and expected as an everyday occurrence, not a one-time or accidental occurrence.”

Knowing how important it is to encourage experimentation and how it fosters and rewards innovative thinking, PIM has created a learning environment that allows flexibility and idea-sharing within a flat organisational structure that promotes a team-based approach and collaboration. 

PIM also believes in building young leaders by allowing them to lead teams and investment strategies while offering them the structure, team support and entrepreneurial environment that will enable them to learn, take on accountability and flourish early on in their careers. 

We are collegial in our approach. Teichgreeber emphasises teamwork across all strategies, enabling investment professionals to experience the different drivers and dynamics of other asset classes. 

We have also intentionally avoided conformity in our hiring process and have built a team of diverse investment professionals with different backgrounds, genders, and religions. We deliberately hire people with complementary skills, making the PIM investment team unique and distinctive in its makeup. 

Positive recurring themes shared by staff are that they are given many opportunities early on, are encouraged to stretch themselves intellectually, and Prescient provides an environment that fosters innovation. 

Looking forward, Accenture’s future of asset management research found that the majority (56%) of asset managers believe they will need to focus more strongly on data science. Prescient is in the favourable position of having already done that for more than two decades. 

Together our technology and team of investment professionals give our investors the best of both worlds: a data science-based investment offering that is managed in a highly rational, logical and systematic way, with skilled and experienced investment professionals who follow the evidence and use their human insights and knowledge of the market to inform their investment decisions. DM/BM

This article was written by Cheree Dyers – Chief Executive Officer at Prescient Investment Management

Disclaimer

  • This document is for information purposes only and does not constitute or form part of any offer to issue or sell or any solicitation of any offer to subscribe for or purchase any particular investments. Opinions expressed in this document may be changed without notice at any time after publication. We therefore disclaim any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable directly or indirectly to the use of or reliance upon the information.
  • Prescient Investment Management (Pty) Ltd is an authorised financial services provider (FSP 612).
  • The value of investments may go up as well as down and past performance is not necessarily a guide to future performance and there are no guarantees.
  • There are risks involved in buying or selling any financial product.
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