The multimanager now asks its managers to model how long it would take them to liquidate their portfolios, with no more than 30 per cent turnover. “Never again do we want a situation where we don’t have a choice,” according to Henaghan, who has spoken previously of having to write “an $800 million cheque” to cover his global bond fund’s currency hedging as the $A plummeted at the height of the crisis. Short runs add up to ‘long run’ So, the fundamental change in the investment framework is a realisation that long-term expectations are a series of shorter-term events and expectations, and the path to that long-term goal should be mapped accordingly, Rogers- Casey’s Barron says. “Correlations over a long period of time between two asset classes might be low, but over a short time horizon they might be high, and what are the implications of that on for example liquidity, can you write the cheques you want to?” he says.

“In a sense everyone makes investment decisions every quarter, do I rebalance, where am I now and where do I want to be. I know what I want to look like in 10 years and here I am today and how do we reflect where we are today in my longer term view. While beta was at everyone’s back that was a pretty easy decision to make, they are harder to make now and you have to have a framework for how you make those decisions. Does that mean you hire global tactical asset allocators to help you? Not necessarily, but that is a choice people are examining.” If there was a silver lining in this crisis, Barron believes it is the reexamination of fundamental investment questions.

The simple, but pertinent, active versus passive debate, is one such re-examination that a lot of funds are undertaking. “Investors are looking at what worked, what didn’t and why. There is a re-examination that maybe there were some managers that have been successful for long periods of time because all they really did was buy dips, lower priced securities and let the market bail them out. As a strategy without intelligence it isn’t really much of a strategy. Those are the kinds of re-examinations that this kind of a crisis bring. If you can say there’s a silver lining, that’s a silver lining,” he says. But he believes it is not just reexamining the active versus passive, but re-examining the whole asset management community.