In this episode of Fund Selectors, host Lucy Walker interviews Matt Piro, Global Head of Oversight and Manager Search at Vanguard. Known primarily for their passive strategies, Vanguard’s $750 billion in actively managed assets is a surprise to many. Matt shares insights into his team’s rigorous process for selecting external sub-advisers, the long-term philosophy underpinning their approach, and the challenges of navigating periods of underperformance. The conversation explores how Vanguard structures its manager research team, the role of deep analysis in evaluating managers, and the importance of balancing consistency and adaptability. A must-listen for those interested in active fund management and sub-advised strategies.

Timestamps:

• [0:03] Introduction by Lucy Walker
• [0:20] Guest introduction: Matt Piro, Global Head of Oversight and Manager Search at Vanguard
• [0:44] Vanguard’s commitment to active management: surprising industry perceptions
• [1:57] Overview of Matt’s role and team structure at Vanguard
• [3:26] The long-term approach to manager selection and evaluation
• [5:46] Balancing specialisation and breadth within the research team
• [7:50] Key elements of Vanguard’s due diligence process
• [10:30] Insights into behavioural analysis and skill-based attribution
• [12:25] A case study on identifying style drift in managers
• [17:30] How team dynamics drive decision-making in fund oversight
• [22:45] Adapting team structure to industry changes and new perspectives
• [29:04] The importance of search readiness and maintaining a strong manager bench
• [36:11] Case study: constructing a core global equity fund with manager diversification
• [43:34] Lessons learned from evaluating managers through volatile periods
• [49:02] Encouraging open dialogue and challenge within the research team
• [54:05] Matt’s book recommendation
• [57:02] Matt answers: “What is your biggest bugbear in manager research?”
• [1:00:02] Matt poses a question for the next guest: What’s a manager research mistake you’ve learned from?