Investment philosophy is top European fund selection criteria

Investment philosophy, transparency and due diligence are the three most important criteria that major European fund buyers consider when deciding on a portfolio manager.

So finds Cerulli Associates in a new report, “European Fund Selectors 2013: Standing Out in a Crowded Market.” The research draws on a survey of 153 European fund selectors, a poll of 14 asset managers representing assets totaling $5.6 trillion, and an asset manager roundtable hosted by Cerulli in London in March 2013 and more than 70 interviews with fund buyers.

When asked to rate their top criteria for fund selection from 1 to 10 (where 1 = not important and 10 = very important), survey respondents rank “investment philosophy” a 9.0 — the highest score received among 10 selection criteria. Transparency of investment process and due diligence process/risk controls rate 8.7 and 8.4, respectively.