The evaluation of asset managers by professional investors.

On Thursday, March 20th 2013, I defended my PhD dissertation at the University of Reims. Alongside with my supervisors, Éric Brian and Danielle Potocki-Malicet, the members of the committee were Olivier Godechot, Philippe Steiner and Christian Walter. I was honored that these prominent social scientists had thoroughly studied my dissertation. Their insightful comments, critics, and questions lead to a very interesting discussion of which I am sure to profit a lot.

In my dissertation, I use the evaluation of asset managers by professional investors as a case for the study of the ways in which economic agent deal with the necessity of acting while facing uncertainty, and to be accountable for one’s actions.

My dissertation follows a durkheimian approach rooted in the works of not only Durkheim, but also Marcel Mauss and Maurice Halbwachs. It combines a morphological analysis of the asset management field with an analysis of evaluation practices of asset managers by professional investors.

Empirical materials of various kinds have been gathered, in order to record the numerous ways in which a total social fact manifests itself. Some of the materials derive from an ethnographic research in the field of asset management: these are semi-directive interviews, direct observations of social interactions, and artifacts produced and used as part of the practices that the research investigates. The other materials are statistics or institutional data that have been collected during the field research. Interpretive analysis has been applied to them.

The morphological analysis of asset management as a social field highlights the divisions, articulations and proportions of the organizations where financial asset management practices are carried out. The autonomization of asset management as a professional field goes along with a social division of labour that is structured around the asset managers. It makes them become speculators, i.e. economic agents who focus solely on price variations. By contrast, other actors ensure that the speculative movement is followed by a fully carried out trade. The income structure of asset management firms feeds a conflict between asset managers and salespersons about the distribution of profit. The resolution of this conflict leads to a polarization of asset management firms between firms following a model designed after the manufacturing industry, and firms following a model leaning towards craftmanship.

The evaluation of asset managers by professional investors makes sense in a social frame where it stands as an appraisal of the efficiency of speculative actions undertaken by agents who try and reduce the financial uncertainty that they face. Professional investors classify their evaluation practices among a "quantitative" analysis and a "qualitative" analysis of asset managers. Although this form of classification may suggest that the two types of analysis cover two kinds of knowledge that are imperfect yet complementary, it is not quantification or calculation per se that differentiates between them. They are functionally related to each other: assessment of the form taken by financial uncertainty on the one hand, and search for the social conditions that caused uncertainty to take such form on the other hand. The form of classification "quantitative/qualitative" meets imperfectly the phenomena to which it is applied. It matches the social distribution of resources that professional investors gained during their socialization trajectory, and that they mobilized in the frame of a specific kind of social division of labour, where analytic practices are also distributed among differentiated positions within organizations.

This dissertation complexifies and enriches the understanding of financial practices and of uncertainty reduction practices by showing that such understanding cannot forget their social foundations. It circumscribes the domain of validity of a specific form of classification and it provides interested actors with tools with which they can discuss anew the efficiency or the relevance of their analytic processes.