I’ve been in this business for almost 25 years. And I’ve seen the same thing happen over and over again: firms get big, add layers, professionalize everything to death… and in the process, completely lose sight of what made them good in the first place.
The culture calcifies. Process takes over. And suddenly, you’ve got smart people spending more time proving they’re working than actually doing great work.
That’s why we built City Different to be, well… different.
The Full Story
If you want the full story with all the data, analysis, etc., check out the video below.
If you prefer the tl;dr (too long; didn’t read), keep reading!
Culture isn’t a perk — it’s a performance driver
From the very beginning, we believed that culture isn’t just a part of performance — it drives it. Not in some abstract, fuzzy way. Tangibly. Daily. Over time.
And not just internally, either. We’ve seen the same dynamic play out in the companies we invest in. The ones with the most differentiated cultures — the ones that truly empower their people — are often the ones that deliver the strongest long-term results.
It’s true in investment management, and it’s true across industries. But most big firms don’t see it that way. They treat culture like a line item. Something to manage, not something to build.
In my opinion, that’s a mistake.
The cost of performative work
Let me give you a real-world example.
I had some friends working on a portfolio team at a larger firm. Smart people. Good track record. And they noticed something interesting in the data — during a stretch of strong performance, their team had also submitted a lot of new investment ideas.
So, they did the logical next thing: they started tracking idea volume. How many new ideas were you contributing each quarter?
At first, it seemed like a smart move; it was a natural extension of what seemed to be already working. But within a few months, things started to shift. The volume went up… but quality dropped off a cliff. Ideas weren’t as sharp. Conviction was lower. Research felt rushed. It became about optics — showing you were contributing — instead of digging deep and doing the work the right way.
Performance suffered. Morale dropped. And the culture became more about gaming an arbitrary metric than delivering value for clients.
I’ve seen that same dynamic play out in countless big firms. Six-to-six office grinds. Endless meetings. Internal reporting that eats up your best people’s time. And when someone burns out? You backfill the role, skip a beat, and move on — without ever asking whether that work was truly necessary in the first place.
It’s what I call performative busyness. Big firms can’t help themselves when it comes to commoditizing and measuring volume of work as opposed to creativity or insight. I also happen to think it’s killing real performance across our industry.
What Netflix taught me about culture
For years, I took an annual research trip out to Silicon Valley. We’d pile into a bus and meet with leaders at our portfolio companies (as well as some we might invest in). But one stop always stood out: Netflix.
We’d get an hour each year with Reed Hastings — not in a conference room with 50 people, but in a small group setting where you could really hear him talk. Unfiltered. Honest. And every year, he’d talk about the same thing: culture.
Freedom and responsibility: Hire grown-ups, trust them to do great work, and then get out of their way. They called it “hiring A players, keeping A players.”
From day one, Netflix gave its people the flexibility to work how, where, and when they worked best. Not because it was trendy, but because it worked. And as they scaled, that culture became a huge part of their edge.
My team at the time invested in Netflix early, not because we saw something in the chart… but because we saw something in the culture. That conviction turned into a phenomenal outcome for our clients.
There’s data — The Street just chooses to ignore it
Culture as a performance driver isn’t just anecdotal… the data is there.
A 2011 study tracked an equal-weighted portfolio of the “100 best places to work.” These were companies selected based on internal culture — how they treat people, how they lead, how they build organizations that last. The results? 3.5% higher annualized returns than the market, even after controlling for other factors.
Let me say that again: 3.5% outperformance, year after year, based largely on cultural indicators.
So why don’t more firms bake this into their process?
Because culture is hard to quantify. It doesn’t fit neatly into a spreadsheet or model. And in institutional investing, if it can’t be benchmarked or standardized, it tends to get ignored.
But in my experience, ignoring culture means leaving alpha on the table.
Client-first starts with your people
Here’s something I think about a lot: the disconnect between what firms say and what they actually do.
Big firms love to say they’re “client-first.” You see it in their brochures, their mission statements, their ads. But when you look at how they treat their employees? It tells a different story.
Why does that matter? Because I’ve got a hard time believing a firm truly puts clients first if they’re not treating their employees like humans… burning out their best people. If they’re forcing six-day weeks, tracking keystrokes, and prioritizing process over judgment… that’s not client-centric. That’s firm-centric.
In my experience, the firms that truly deliver for clients are the ones that treat their employees like whole people. Firms that build cultures of ownership, purpose, and trust… who empower their people — and hold them accountable — without micromanaging them to death? That’s where differentiated performance comes from.
It’s not a “feel-good” philosophy… it’s a performance strategy.
Why we went remote-first from day one
Case in point: that’s a big reason why we launched City Different as a remote-first firm from the jump.
Not because it was easy. Not because it was fashionable. But because we believed — deeply — that the best investors do their best work when they have autonomy. Flexibility. Control over how, where, and when they work.
In our industry, our biggest assets walk out the door every day (or in our case, they walk from their home office to the kitchen). Either way, we want to keep them… not replace them.
And to do that, we need to build a culture that supports their whole lives, not just their output. We need to create the kind of environment where talented people want to stay and are empowered to thrive.
What we’re really building
So when we talk about culture, we’re not talking about happy hours and ping pong tables. We’re talking about alignment. About autonomy. About long-term thinking — both for our team, and for our clients.
Because when you build a culture that supports exceptional people, and you give those people the freedom to do their best work?
That’s when the magic happens. And that’s the bet we’ve made at City Different.
Watch the full video
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