We are convinced that active management can add significant value in the vast majority of asset classes relevant to institutional investors. Especially in an environment of low interest rates and uncertain risk premiums, these market-independent additional returns ("alpha") provide a valuable contribution to the sustainable achievement of investment objectives, but only the best performers among active managers can reliably generate alpha after costs.
We underline our focus on the success of our clients by acting on a pure performance basis in the selection of asset managers. In other words, we only charge our clients a fee if the manager selected by us actually delivers a positive additional return (after costs). This purely performance-based compensation model ensures maximum incentive compatibility and alignment of interests with our clients' investment objectives.
At the beginning of each selection process, we agree to a specific mandate profile with our clients. Subsequently, we start a market approach taking into account the individual requirements of each client.
We screen the global manager universe for the desired asset class via our alphaport® manager database as well as other commercial databases. The screening includes an initial assessment of quantitative as well as qualitative factors. In the end, we identify a long list consisting of candidates that best fit the client's individual mandate profile. At this screening stage, we already take into account potential client specific ESG requirements.
We now conduct comprehensive quantitative and qualitative analyses of the long list investment strategies. The asset managers first complete a short questionnaire and we then conduct video conferences with the portfolio managers. ESG aspects are taken into account both in the questionnaire and in the face-to-face meetings. In a joint meeting, we then present the long list candidates to our clients in compact form and recommend selected investment strategies for the short list on the basis of a structured comparison of the most important success factors.
The core of our selection process and a central success factor is the qualitative due diligence of the short list candidates. We first evaluate another mandate-specific questionnaire and then conduct a detailed due diligence, usually on-site at the manager's premises or alternatively via video conferences. The personal exchange with the members of the investment team as well as other relevant persons (ESG, Risk & Compliance, Trading, etc.) and the holistic analysis of the investment process as well as the systems is, in our view, indispensable in order to be able to make a well-founded and high-quality selection recommendation.
In the final step of the selection process, we invite the finalists to a personal presentation at the customer's premises. Subsequently, we conduct an interactive selection workshop together with our clients, in which we jointly reflect on the impressions and systematically evaluate our findings on the final candidates with the help of a specially developed scoring procedure to ensure an objective evaluation. In addition, we support our clients in negotiating the best conditions with the asset managers.
Our service does not end with the beauty contest. The ongoing support of the selected manager over at least 5 years, including regular reporting, is an integral part of our consulting services. We continuously monitor the performance of the mandates and check whether the strategic success factors of the manager are still intact. If necessary, we suggest specific measures for optimization to our clients. We aim to ensure that the mandate is optimally staffed over time, as we act for our clients exclusively on a pure performance basis.
When considering sustainability aspects in asset management, various implementation paths can be taken. These range from the implementation of specific exclusion lists, ESG integration in the analysis process of asset managers, to the active exercise of voting rights and engagementt in terms of specific sustainability goals. The appropriate approaches also vary with the asset classes chosen. For us as consultants, it is also important to approach this point with individual solutions; a "one-size-fits-all" approach does not lead to the desired results. If necessary, we agree with the client which implementation path is desired and makes sense. This is the basis for our long and short list questionnaires and the discussions with the people involved on the managers' side.
Maximum performance incentives and full compatibility of interests through purely performance-based consulting compensation without base compensation
Consistent focus on liquid asset classes with the claim to deliver outstanding project quality there
Highest possible consulting quality with on-site visits to managers supported by an excellent team of consultants
Get to know our team, our way of working and our investment philosophy in the field of structured manager selection better via the alphaport® Portfolio Health Check:
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