Rock Star or Shooting Star? (A)
9 Pages Posted: 30 May 2017 Last revised: 10 Nov 2021
Abstract
Set in an investment firm, the A case presents the president going through a review process with the firm's portfolio managers. By all accounts, Fred Silverton's financial savvy and skills had had helped the staggering mutual fund company reach success. The case runs through issues and actions directly involving Silverton. Despite Silverton's success, there were some who were alarmed over his approach to human capital. Nonetheless, the president considers Silverton in the race to lead an offering expansion. As the president goes through Silverton's behavior at work, she has to decide if there is a problem or if Silverton is just walking the line but hasn't crossed it. Does Silverton see he has a problem regarding the impact of his behavior on others?
Excerpt
UVA-OB-1198
Rev. Jan. 19, 2018
Rock Star or Shooting Star? (A)
Maria Himes, president of Hawthorne Investments (Hawthorne), generally enjoyed the annual review process. It was her chance to personally meet with each of the 65 portfolio managers (PMs) who directed the investment strategies for the $ 41 billion collectively under management in Hawthorne's mutual funds. The review process offered a chance to talk through each manager's performance, outlook, and hiring needs; to discuss compensation; and to be available and open for any feedback from which she could glean best practices and help implement them across the company. In certain cases, however, she had to send a tough message or worse. This was the part Himes disliked, but it was rarely necessary. Sending tough messages wasn't the Hawthorne way. Patience, a long term view, transparency, and integrity were the foundational principles that had directed the company's growth since its founding in New Jersey in 1953.
The next name on her list to be reviewed this Friday morning was Fred Silverton, PM of the $ 803 million Hawthorne Event Driven Opportunities Fund (HEDOF). Himes crinkled her face, thinking. Silverton had been with Hawthorne just over two years but had already made a significant mark. Hired from Middle Market Investment Bank (MMIB) to launch Hawthorne's first offering in the alternative or hedged mutual fund category, Silverton's star seemed to be rising. The HEDOF had generated returns in the top decile of its peer group over its first two years, and assets had grown significantly as investors sought to determine the most promising funds in the nascent category (Exhibit 1.) Hedged mutual funds were hot, and Hawthorne had plans to grow its fund offerings in the space. But Silverton had crushed some glass on the way to posting strong results. Two of the three analysts hired by Silverton had quit in recent months, and Hawthorne's board wanted Himes to assess whether Silverton's aggressive hedge fund approach would mesh long term with Hawthorne's time-tested culture. Himes hoped her review with Silverton would answer some questions before her meeting with the board next week.
Hawthorne Investments
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Keywords: improving performance, management styles, appraisals, leadership
Suggested Citation: Suggested Citation