Factors to Consider when Selecting a Fund Manager
Year-end is a good time to reflect on key decisions - and the selection of investment managers is one of the biggest decisions made by asset owners.
In keeping with a spirit of festive reflection, our Research Team has selected their favourite Manager Selection papers of 2017. Do let us know of any other great papers you would add to this list!
Selecting Fund Managers and Consultants - What Do Trustees Look For? (Aon Hewitt)
This 11-page paper is a collaborative effort between Aon Hewitt and Leeds University Business School. It examines the relationship between trustees and their fund managers and investment consultants.
Global Investment Management Fees: New Savings, New Challenges (bfinance, 2017)
Bfinance presents new data which highlights falling fees in several sectors, particularly where incumbents have faced strong competition from cheaper entrants or where the investments landscape has evolved.
Brand Awareness: Quantifying the Impact on Asset Manager Growth (eVestment)
Brand awareness answers the question, how familiar are investors with your firm and your products? This paper by eVestment identifies a metric based on consultant reviews as a proxy for brand awareness at the firm and product levels.
Does Past Performance Matter? The Persistence Scorecard (S&P Dow Jones Indices)
When looking at the active versus passive argument, a key determinant of success is the ability of an active manager or active strategy to deliver above-average returns consistently over different periods.
The Folly of Hiring Winners and Firing Losers (Research Affiliates, 2017)
Research Affiliates explains how the common procedure of firing losing managers and hiring winning managers on the basis of their performance over the previous three-years leads to losses. The authors encourage investors to look forward - not just back.
Manager Selection: Shining a Light on Shadow Searches (eVestment, May 2017)
This paper discusses some of the trends in manager screening activity, and how managers can use this information to position themselves for success.
What Free Lunch? The Costs of Overdiversification (CFA Institute, 2017)
This paper reviews the how many external investment strategies are deployed by public and corporate pension funds in the U.S. The analysis reveals that typically large pension funds are over-diversified.
Do Asset Managers owned by banks deliver inferior investment performance? (2017)
In this paper, Miguel A. Ferreira, Pedro Matos and Pedro Pires examine equity mutual funds performance when run by fund management divisions of commercial banking groups using a global sample.
Impact of Strategy Size on Performance: Global Report (eVestment, 2017)
This report provides an overview of the quantitative and qualitative characteristics of small, medium, and large strategy sizes within the most viewed universes by USA-based and Canada-based consultants and institutional investors.
How to pick a quantitative hedge fund (MAN Group, Sept 2017)
The authors of this paper examine some of the key characteristics of quantitative hedge fund strategies, offering perspectives for investors on selecting the most appropriate one to meet their needs.
Hedge Fund Flows and Name Gravitas (2017)
This paper explores the relationship between investors allocation of flows to hedge funds and the name gravitas of those hedge funds.
DNA of a Manager Search: Infrastructure (bfinance, 2017)
In the current market, investors face increasingly diverse and challenging opportunities when seeking unlisted infrastructure. This paper examines in detail three recent infrastructure searches which reveal compression of returns and other recent developments.
Active Share and the Three Pillars of Active Management: Skill, Conviction, and Opportunity (CFA Institute, 2016)
This article by Martijn Cremers, Professor of Finance at Notre Dame (Indiana), relates Active Share to the fund manager's individual stock-picking skill, conviction, and opportunity.