This antbropological study of the world of institutional investing focuses on nine large pension funds. Using traditional anthropological methods, the authors observed these funds at work and conducted wide-ranging interviews with people involved in every phase of the funds investment operations. In talking about what they do and why they do it, these insiders effectively set the research agenda.
The authors most important finding is the extent to which economic and financial analyses do not dominate investment decision making. Instead, in choosing investment strategies, evaluating investment options and hiring, firing and retaining external managers, fund executives appear to be motivated more by the kinds of cultural influences that drive less consequential decisions. These include the quirks of institutional history and corporate politics, the desire to displace responsibility, and the demands of maintaining smooth personal relationships. As the American economy comes to depend more and more on institutional capital, these findings raise troubling questions for the long term.