Asset Manager Selection for institutional and private investors

At a glance

  • Asset Manager Selection for institutional investors (pension funds, trusts, insurance companies, companies, etc.) and private investors (private investors, family offices, UHNWI)
  • Transparent selection and due diligence of asset managers following the best institutional practice and governance and the principle of an open and free competition and the equal treatment of all participants.
  • Proven experts and great expertise in all asset classes such as equities, bonds (government and corporate bonds), mixed mandates, real estate and alternative investments such as hedge funds, commodities, private equity, insurance linked securities, etc.
  • Long-standing practical experience through successfully concluded public invitations to tender in accordance with Swiss law and international standards (e.g. WTO Argreement on Government Procurement GPA)
  • Combined expertise in economic and legal aspects of asset management, global custody (custodian bank), investment management, etc.
  • Transparent benchmarking of tenders thanks to peer group comparisons
  • Extensive knowledge of the financial industry as a result of our activity as investment consultant and investment controller
  • Independence and strict avoidance of conflicts of interests

Selection of asset manager and custodian bank

A professional and systematic selection process as well as considerable knowledge of the economic, operational and legal criteria and risks are key issues of a successful selection. We have long-standing experience and expertise in both non-public tendering and public tendering in accordance with the WTO agreement. Our selection process is systematic and clearly structured and allows for the selection of providers in strict adherence to the principle of free and open competition and the equal treatment of all participants. Our selection process adheres rigorously to the requirements of best governance.

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Best fit

In our process, we consciously avoid standardized lists, but select possible candidates based on clear guidelines and criteria in terms of best fit. Based on your investment guidelines, the corresponding benchmarks and further specifications of the tendered mandate (asset management, global custody, etc.), we develop a recommendation regarding the requirement profile, the mandate specifications, the legal requirements and specific selection criteria. Important parameters, e.g. admissibility of securities lending, use of derivative instruments, retrocessions, reporting and legal requirements are factored in at an early stage of the selection process and increase the probability of successfully awarding the mandate.

Assessment by expert

The analysis and evaluation is made by proven experts with an excellent education and professional experience. Our expertise is combined with our detailed knowledge of the managers’ investment activities we acquire by our investment controlling as well as our legal know-how. For each asset class there is a specialist supported by several deputies. The partners and employees of PPCmetrics are proven experts and regularly active as consultants/lecturers in their field of expertise. They regularly share their expertise with a broad public by writing various publications. We have been active as investment consultants and controllers for institutional investors in Switzerland, Germany, Luxembourg and other European countries for more than 20 years. Thanks to our long-standing experience as legal consultants, we have broad investment-specific know-how as well as deep knowledge of various legal systems including the Anglo-Saxon common law.

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Open selection process

Every tendering process that we conduct is based on our open data base. This data base is regularly updated and currently includes the leading custodian banks as well as more than 3’000 asset managers for various asset classes such as equities, bonds (government and corporate bonds), mixed mandates, real estate, and alternative investments such as hedge funds, commodities, private equity, insurance linked securities, etc.

Every manager can register for free and is systematically considered in the selection process.

Assessment based on clear criteria

The analysis and assessment (tenders, due diligence) are based on clear and structured economic, legal and operational criteria such as:

  • High level of stability and specialization of the asset manager or the custodian bank
  • Excellent education and professional experience of the responsible people
  • Comprehensible investment approach, clearly structured processes and appropriate risk management
  • Market-compliant asset management fees, custodian bank fees as well as transparency of costs
  • Performance in the past / track record

Best governance

The PPCmetrics selection process adheres rigorously to the requirements of best governance. Written tenders, our evaluation of tenderers, including recommendation and – if required – a presentation by tenderers, enable clients to make an informed and transparent decision when awarding a mandate. The open process, clear criteria and our comprehensive documentation ensures a fully objective and documented conduct. We register the fees offered by tenderers, from contract negotiations we conducted and from the investment controlling mandates. Thus, we have an overview of the current fees as well as the historical development for the evaluation and benchmarking of the tenders. This ensures competitive market conditions for asset management. Our process is rigorously tailored to the needs of our clients.

Interactive tools

We use advanced tools for analysing the tenderers and a tailored comparison of the asset managers and portfolios as well as the quality of services offered by the custodian banks. We use our proprietary software that we have been developing for several years.

 


Contact persons

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Dr. Andreas Reichlin
Partner

Contact

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Oliver Kunkel
Division Head Asset Manager
Selection and Controlling
Contact


Publications

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Is faith in past winners justified?

Is faith in past winners justified?

Rankings of top performers are publicly available for retail funds. However, databases for institutional mandates (segregated accounts and institutional funds) are still incomplete and rare. For our historical simulation of picking past winners we use a set of track records that were submitted by asset managers as part of public and non-public mandate tenders for institutional clients in Europe.

Asset Liability Management Today – Is it Still Fit for Purpose?

Asset Liability Management Today – Is it Still ‘Fit for Purpose’?

The target of asset liability management is to align the assets to the liabilities, i.e. managing risks due to mismatches between the assets and liabilities.

Challenges Pension Funds Face due to Low Interest Rates

Challenges Pension Funds Face due to Low Interest Rates

Risk-averse asset-only investors should go for short duration as risk return is distributed highly asymmetrically.

Investment Strategies in the Year 2013 - English Version

Investment Strategies in the Year 2013 - English Version

In the year 2013, there were losses in the bond markets, while equity markets had high positive returns. As a result, the investment results of the different strategies varied widely. Pension funds, which have fully used their risk capacity through a large equity exposure, were able to benefit from this market environment. In addition, currency hedging and investments in corporate bonds, small caps, and non-listed real estate were positive as well...

Is factor-based allocation new?

Is factor-based allocation new?

Factor-based allocation may be theoretically interesting for Swiss pension funds but it is hard to implement in a practical way.

Asset Manager Selection based on historical performance - English Version

Asset Manager Selection based on historical performance - English Version

Historical performance is a frequently used criterion to select asset managers. Our empirical analysis, however, shows that after hiring an asset manager with such an outstanding performance, the asset manager performs significantly worse in the period after the selection. In some cases, the selected managers even performed significantly worse than a control sample.

Asset Manager Selection under Public Procurement Legislation

Asset Manager Selection under Public Procurement Legislation

"Why has the selection process and transparency become more important in the search of asset managers? What is different in a public procurement process under EU Regulation than in a ´normal´ selection process? How to deal with a very high number of candidates? Our experiences with public tenders in the last 5 years"

 


Factsheets

Asset manager selection

Public tendering procedure