Performance Measurement is the critical asset management activity by which a firm presents its investment performance externally to clients and potential clients or internally to its portfolio managers. It extends valuations reporting by enabling comparison across funds and in analysing the components of performance. This forms the basis for managers to change investment strategies or tactics and the basis for client decisions to select and change policies (or firms).

Many asset managers are reviewing their performance systems to develop capabilities for:

• Decision support for portfolio managers, for better performance analytics
• Client reporting improvement in quality and delivery
• Compliance with Global Investment Performance Standards
• Operational enhancement of legacy systems by increasing integration and automation

Our Experience

We are equipped to advise on all these issues and implement chosen solutions. Examples of projects that our consultants have implemented include:

• Performance measurement, statistical measures
• Performance and client reporting
• Benchmark sourcing and construction
• Security classification hierarchies
• Security, pricing, transactions, valuation, total return
• Package implementation

We offer training courses on performance, which may be tailor-made to your requirements. Our performance capabilities are complemented by our other investment support offerings of:

• Package and product selection processes for investment systems
• Investment management process models

Our Approach

Whether analysing third-party products, developing bespoke solutions, undertaking performance calculations ourselves or training our clients' staff we first model the requirements with a Cash Flow Model, as shown below. This allows us to see the full complement of transactions affecting a security within the period under examination. From security level performance we are able to construct sector level, asset class, country and regional performance figures, and of course returns can be calculated for the whole portfolio.