Key Takeaways
- • Cambridge Associates laid off roughly four dozen employees, about 3% of its roughly 1,300-person global workforce, according to the Wall Street Journal's March 14, 2017 report.
- • The investment consultant, which manages about $142 billion, is cutting staff while attempting to reposition itself as an investment manager rather than solely an adviser.
- • Pressure on the traditional consulting model stems from competitive fee compression and investors' shift toward low-cost passive index products.
- • Some publisher summaries indicate the total cuts, including a few employees laid off in February, approached 50 positions.
Summary
Cambridge Associates laid off roughly four dozen employees last week, according to the Wall Street Journal, as the pioneering investment consultant contends with pressures in its core business while it attempts to remake itself as an investment manager. Per supplemental coverage of the same story, the layoffs comprised nearly 50 positions, including a handful of employees let go in February, and affected roughly 3% of the firm's 1,300-person global staff.
Cambridge is one of the best-known advisers to endowments, foundations and wealthy individuals, serving as a gatekeeper between these deep-pocketed investors and the Wall Street firms seeking their capital. The firm manages approximately $142 billion, according to the Journal's headline figure. Its consulting model has come under strain from increased competition that has driven down fees, as well as from investors' growing preference for low-cost, passive index products.
The cuts underscore the broader strategic shift under way at the firm. By expanding into investment management, Cambridge is seeking to diversify away from a fee structure that has been eroded by competition. The Journal's reporting, authored by Juliet Chung, frames the layoffs as part of that transition rather than a standalone cost exercise.
Cambridge is one of the best-known advisers to endowments, foundations and wealthy individuals, serving as a gatekeeper between these deep-pocketed investors and the Wall Street firms seeking their capital. The firm manages approximately $142 billion, according to the Journal's headline figure. Its consulting model has come under strain from increased competition that has driven down fees, as well as from investors' growing preference for low-cost, passive index products.
The cuts underscore the broader strategic shift under way at the firm. By expanding into investment management, Cambridge is seeking to diversify away from a fee structure that has been eroded by competition. The Journal's reporting, authored by Juliet Chung, frames the layoffs as part of that transition rather than a standalone cost exercise.
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