For pension funds and other fiduciaries, assessing an investment manager’s “skill” as a part of the process of manager selection and ongoing monitoring is a critically important aspect of the fiduciary duty they perform for their clients. One firm that has developed a technique for helping funds to just that, Inalytics, won “Investment Consultant of the Year” and “Software Provider of the Year,” at the Global Pensions Awards 2010 on March 16, in London. Pension funds themselves nominate candidates for this award, according to Inalytics’ announcement on March 18.
Inalytics gathers data from managers themselves or their custodian or record keeper, including every position and trade, long and short, and uses proprietary mathematics to quantify managers’ skill at getting into and out of securities–and being long or short–at times that benefit portfolio performance. Simply put, are the managers in the stocks at times when they outperform? Are they out of the stocks–or short–when they underperform?