Knowledge Management for Investors: Filling Knowledge Gaps via Networking and External Partnerships

17 Pages Posted: 11 Feb 2019

See all articles by Eduard Van Gelderen

Eduard Van Gelderen

Erasmus University Rotterdam (EUR) - Department of Financial Management

Ashby H. B. Monk

Stanford University - Global Projects Center

Date Written: February 9, 2019

Abstract

Strategic partnerships can help companies improve their business models and profitability. The main advantages of strategic partnerships relate to their flexibility around financial commitments, focus and time: they are often less capital intensive than an M&A pathway; they can be focused on a specific business process or project, and they can take less internal human resources (e.g., time) to achieve a desired outcome than if a company launched a full greenfield operation internally. Asset owner investors, such as pension funds, endowments and insurance companies, are increasingly exploring strategic partnerships to be able to pursue more ambitious projects (in order to realize higher investment returns) without the need to meet higher resource requirements. For a variety of reasons, many asset owners have limited capacity to build up full-fledged internal investment operations. Joining forces with peers and asset managers could help solve this problem, which is why a ‘Collaborative Model’ of institutional investment is growing in popularity. Yet, for a strategic relationship to be successful, the asset owners must first gain a deep understanding of their own knowledge gaps related to the investment innovation or investment strategies they want to pursue. These gaps concern specific market insights, skills, networks, available data sets, algorithms, and access to deal flow among other things. In this paper, we discuss internal knowledge tools as a way to identify gaps, which in turn can help investors find the right partner to fill these gaps. We argue that knowledge is key to long-term success, and these external partnerships are increasingly necessary in this regard.

Keywords: Knowledge Management, Asset Management, Institutional Investment, Organizational Design, Strategic Partnerships

Suggested Citation

Van Gelderen, Eduard and Monk, Ashby H. B., Knowledge Management for Investors: Filling Knowledge Gaps via Networking and External Partnerships (February 9, 2019). Available at SSRN: https://ssrn.com/abstract=3331643 or http://dx.doi.org/10.2139/ssrn.3331643

Eduard Van Gelderen

Erasmus University Rotterdam (EUR) - Department of Financial Management ( email )

P.O. Box 1738
Room T09-53
3000 DR Rotterdam
Netherlands

Ashby H. B. Monk (Contact Author)

Stanford University - Global Projects Center ( email )

United States

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