The Problem

The portfolio management team was unable to provide easy to interpret reports to internal stakeholders using existing performance analysis tools. The primary issue was the inability of the tools to analyze externally managed funds and comprehensively identify key fund exposures in order to make well informed fund selection decisions.

In addition, the Head of Equity Investments required deeper analysis on a particular fund, to understand which factor biases the fund was exposed to and how these were affecting performance. This information needed to be quick and easy to understand in order to gain instant insight into poor performance in particular.

Additionally, the operational burden of uploading fund data on over 200 funds in different formats and frequencies was causing internal inefficiencies on reporting.

The Solution

By gaining the required insight into how factor exposures were driving fund performance using holdings-based analysis at portfolio and peer level, both the external and direct investment teams enhanced the decision-making process.

Adopting this analysis into the due diligence process gave the external investment management team a better understanding of exposures, risks and how this impacts performance. The direct equity investment team could then adapt their fund exposures to realign the fund with the stated investment philosophy.

With new EU and UK regulation on sustainability aimed at Asset Owners, there is an additional value that the ESG team can monitor ESG exposures from a variety of data providers in one central platform.