Mon, Jul 6, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Absolute return performance study shows manager skill best revealed through decision analysis

Tuesday, May 31, 2011

By Beverly Chandler, Opalesque London

Specialist research and performance evaluation firm Inalytics and alternatives managers GLG have conducted a case study which shows that evaluation of every decision a manager makes in managing his or her portfolio gives a reliable measure of skill.

In Analysis of Management Skill, Inalytics’ Rick di Mascio and GLG’s Simon Savage refer to a study of school pupils in the US which found that high school grades are the most accurate predictor of achievement in the first year of college. However, the report observes "In our industry, intuition does not correspond with reality as a good period of performance is just as likely to be followed by a poor one."

The problem, according to the report, is that most institutional managers choose their managers based on their past performance, and while the Inalytics database shows that skills does exist, it doesn’t appear to be captured by looking to the past track record.

"Accepting that Managers have skill, but it is the tools used to find it that have let us down, requires a radical change in the way we go about evaluating Managers. By turning away from track records, and towards an evidence based approach that analyzes every decision a Manager takes to identify their real strengths and weaknesses, we have found the framework we are seeking" the report says.

This framework relies on analysing every purchase, sell and every decision to include or exclude a stock in a portfolio whic......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: New systematic strategy managed alongside research firm outperforms S&P500[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: An emerging CTA manager explains how he runs his strategy, which is based on an index produced by a research firm. Peter Turk is head of

  2. Opalesque Exclusive: New systematic strategy embraces machine learning[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The founder of a New York-based systematic trading firm, which offers a hybrid between alpha strategies and alternative feta at lower fees, describes his approa

  3. Larry Robbins' hedge fund Glenview buys 1m Tenet Healthcare shares[more]

    Komfie Manalo, Opalesque Asia: Glenview Capital Management said it bought an additional 979,482 shares at Tenet Healthcare Corp valued at $53.80 million, raising its stakes in the healthcare services company to 15.16%, reported

  4. Legal - Grayson’s hedge funds under scrutiny for possible ethics violations, Court rejects hedge fund’s motion to block merger of Samsung affiliates[more]

    Grayson’s hedge funds under scrutiny for possible ethics violations From Freebeacon.com: Rep. Alan Grayson is finding himself in hot water over managing hedge funds that bear his name, actions that are in possible violation of House ethics rules. Sitting members of Congress are prohibite

  5. Hedge funds decline in June as stocks tumble on Greek woes[more]

    From Bloomberg.com: Hedge funds posted losses across strategies last month as uncertainty over whether Greece will remain in the euro sent global stock markets tumbling. Winton Capital Management declined about 3.1 percent in June in its $12.1 billion Winton Futures Fund, leaving it down 1.9 percent

 

banner