A Suite of Evidence-Based Methods for External Manager Selection
Empirically offers institutional-grade strategy evaluation capabilities tailored to the needs of the world's most sophisticated and heavily-scrutinized asset owners and fiduciaries.
How We Work
In conjunction with your existing diligence and portfolio management processes, our solutions add value at specific decision points related to hire/fire decisions:
1. Define Objectives
Our customized deliverables are calibrated to the goals motivating the potential use of an active strategy:
- Outperformance: Generating returns in excess of, or at lower risk than, a reference index
- Uniqueness: Accessing investment opportunities which lack a suitable passive alternative
- Non-Financial Priorities: Implementing additional targets, such as ESG and diversity considerations, at the end investment or fund manager level
Our analysis takes into account the client's broader asset allocation and existing manager lineup, and can accommodate additional priorities such as minimizing the risk of falling short of required returns, or balancing longer-term gains with shorter-term performance risks.
2. Apply Tools
Bringing to bear our purpose-built methodology, we can generate robust answers to complex and multifaceted evaluation questions. Our core tools include:
- Reformulating the problem in ways that enable the application of cutting-edge statistical and machine learning techniques
- Harnessing our vast proprietary data pool to calibrate, test and deploy high-accuracy models
- Incorporating multiple types and levels of uncertainty to facilitate the structured exploration of potential outcomes
These tools enable us to provide deliverables that gain common acceptance, even among decision makers with differing views and priorities.
3. Communicate Findings
We report our findings using plain language and elegant explanatory diagrams that directly tie into the client's objectives, with no ambiguity or translation needed. Our output conveys:
- Our conclusions, with probabilistic confidence intervals
- A sensitivity analysis of the conclusions to alternate scenarios, including different preference sets and future expectations
- The methods we used to reach our findings, and their rationale
- The assumptions, limitations and potential sources of estimation error in our work
Additionally, we can present and discuss our work with investment committees and other client stakeholders as required.
Overcome the challenges of short track records and fluctuating market environments to assess managers versus passive alternatives.Learn More >>
Objectively determine the extent to which a manager's stated ESG integration approach is being implemented in portfolio decisions.Learn More >>
Adjust for off-benchmark exposures and index inefficiencies to uncover the true skill level of a manager and estimate future value added.Learn More >>
Open the black box of hedge fund strategies to better understand the drivers, quality and repeatability of past results – and determine which managers possess unique alpha sources.Learn More >>
Harness sophisticated custom benchmarking and analytics to quantify the true skill of a private equity management team.Learn More >>