Having complex investment strategies is a common denominator among our clients
Bas Leerink: “The asset managers on our client list are typically those that have a large institutional client base and want to differentiate themselves by tailored or specialized investment strategies that truly add value for their end clients. In order to support those strategies they need specialized tools for performance measurement and attribution. So having complex investment strategies in place is a common denominator among our clients.”
The article addresses other topics as well, like “the increasing attention of ESG” and “ability to provide attribution across multiple levels as portfolio, sector and sub-sector for asset managers versus asset owners”.
On the latter Leerink mentioned: “Last years, asset managers also started to include the more traditional asset owner type of decisions with the introduction of fund-of-funds where they add value through management of the asset class allocation or by implementing overlay strategies for their clients. For those asset managers we see the need arising for more complex evaluation techniques, including the top-down analysis.”
When it comes to asset owners on this question he said: “Asset owners have a greater interest in attribution across multiple levels, and especially the extension to decision-based attribution that allows for a consistent evaluation of a layered decision process which includes strategic and tactical allocation decisions and overlays”. Organizations can use this to identify their own strengths and weaknesses in their investment processes. Leerink: “They can monitor the amount of (ex-post) risk involved in each decision and compare this with their ex-ante expectations or risk budgets. This is of course very powerful input for their forward looking investment decisions.