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Normal Portfolios and the Sponsor/Manager Relationship
Nov 1, 1989
The concept of a normal portfolio is a simple one on the surface. A normal portfolio is simply a portfolio that represents an investment manager's style. However, in practice one quickly uncovers a number of difficult and subtle issues that make the development of normals a task requiring great care and thought. Many of these issues are a result of the complex, and sometimes contentious, relationship between the owner of funds (the sponsor) and the manager of the funds. This note will examine normal portfolios in the context of the sponsor/manager relationship.