Fund & manager selection process

A thorough process

The manager research process seeks to identify those investment managers that will add value to each client portfolio. The process combines quantitative and qualitative methods to add value from selection. We have an unfettered approach to selection with access to funds within mutual fund and managed account universes globally and we work to filter these universes according to the specialisation of investment managers, by geographic area, asset class and management style.

It is not simply a question of selecting the best investment manager in each asset class or market style category. It is far more important to identify those investment managers that will be able to sustain alpha generation over a full market cycle.

Selection principles

Find managers with specific skills (i.e. determine repeatability of outperformance)

• By identifying those managers with comprehensible, disciplined investment processes and with consistent investment behaviour
• By identifying patterns in managers' performance against their position in market cycles

Avoid decision traps (i.e. evaluate alpha risk)

• By evaluating when alpha is negative across a market segment or during a market phase, unnecessary costs are avoided by moving from active to passive strategies

Identify best combinations (i.e. diversify skills)

• By focusing on the correlations between those funds and asset managers selected, and by looking for the optimum spread of strategies to deliver repeatable risk-adjusted returns