Solutions // Institutional Investors

Allocate with confidence.

Active management can propel your portfolio to peer-leading results ― or be a source of headaches and underperformance. Use our technology to approach high-stakes decisions with greater structure, conviction and accuracy.

Use our analytics standalone or seamlessly in conjunction with other due diligence inputs.

Empirically Adds Value Along the Full Life-Cycle of an External Manager Relationship

Cut through the data overwhelm of performance ratios, research reports and ranking scorecards. Focus on actionable predictive analytics and sound decision frameworks that drive better results.

Arm your investment committee with objective, forward-looking metrics that describe, using plain language and elegant visualizations, exactly what they can expect from an allocation decision ― along with "what-if" scenarios and statistical confidence intervals.

Clients served:

Endowments & Foundations
Corporate Treasuries, Insurers & Healthcare Organizations
Family Offices & Multi-Family Offices (MFOs)
Governments & Sovereign Wealth Funds

Searches
Identify the shortlisted manager with the highest probability of meeting the objectives of the search, if hired. Compare the skill level exhibited in widely disimilar funds on an equal basis.
Reviews
Assess the drivers and quality of realized results given the manager's opportunity set. Estimate the likelihood that a switch would add value, and identify the optimal switching time.
Asset Allocation
Determine whether active management is warranted for a given exposure, as compared to the Best Passive Alternative. Simulate a wide range of market environments to understand active risk.

Do More In-House

Supercharge your internal capabilities with our technology for greater control and transparency, while reducing advisory fees.

Improve Performance

Increase risk-adjusted returns from your external manager program by leveraging improved decision support tools.

Boost Compliance

Document selection decisions with objective analytics supporting the rationale, prudence and cost-efficacy of your choices.

Outputs Tailored to Your Exact Needs

All of our work is customized and produced on demand for the client's exclusive benefit, incorporating the latest available information and the specific parameters of the request.

Ad-Hoc Engagements

Get targeted help with a specific mandate, review exercise, presentation or other internal project with no ongoing commitment.

Fixed Retainer

Request Empirically analytics for an unlimited number of searches, manager reviews and other projects in one or more asset classes.

Case Study

Problem

Reviewing monthly and quarterly reports from more than 30 external managers created a major drain on the investment team's internal resources. It was unclear what should be prioritized and whether outlier results represented noise or a structural break.

Solution

Empirically developed a system to streamline its monitoring process by providing a clean dashboard of up-to-date, directly comparable predictive analytics. This allows the team to focus its limited resources on deeper attention to managers with greater underperformance risk.

Case Study

Problem

A university endowment wanted to increase its allocation to systematic hedge funds but was unsure how best evaluate them. The funds being considered provided few concrete details on the workings of their strategies, and some strong candidates had less than 4 years of history.

Solution

Empirically used its Replicator capability to construct bottom-up models of each strategy, revealing their sources of returns. To account for differing histories, statistical decision models were estimated which enabled a fair and uniform comparison of the alternatives.

Case Study

Problem

A private foundation was considering terminating 2 underperforming managers and replacing them with smart beta products. However, the trustees were concerned about the risk of "locking in" the losses, and then underperforming again if the managers rebounded after being terminated.

Solution

Using its StateSpace capability, Empirically concluded that the two strategies were unlikely to rebound on a relative basis in the short term, resulting in a recommendation to switch immediately. Using its Premortem capability, Empirically quantified the probability that such an action would result in regret (underperformance) vs. holding.

Case Study

Problem

A superannuation fund wanted to provide unified reporting and tracking of its ESG exposures and risks. Writing, distributing and aggregating endless questionnaires, and dealing with missing and non-comparable data, had become a major headache for the team.

Solution

Empirically's RealESG capability provides the fund with objective quantitative measures of the actual (as opposed to stated) ESG exposures and behaviors of its active managers, updated quarterly with minimal time overhead. Plus, the tool estimates funds' proneness to future ESG controversies.

Case Study

Problem

The CIO of an insurance company's discretionary portfolio was considering shifting more assets into smart beta products. He wanted to quantify the probability that the proposed switch would add value over the next 2, 5 and 10 years.

Solution

Empirically estimated predictive models for the portfolio's current manager slate and the proposed smart beta allocation and simulated them over a range of potential market conditions. The results indicated a strong business case for the move.

Case Study

Problem

A large institutional investor planned to make several new private equity investments. The investor wanted a stronger framework for rating the funds under consideration than simply reviewing the IRRs of the managers' past funds against peer groups of the same vintages.

Solution

Empirically constructed bespoke custom benchmarks for each fund previously run by the managers that had cleared initial due diligence, and used them to quantify skill. Empirically also delivered a tool to facilitate consistent, integrative decision making about private equity investments going forward.

Illustrative Due Diligence Workflow

Guided by the Empirically Compass, we can help ensure you make fully-informed choices that have the highest probability of meeting your objectives.

Empirically Consultation

If we are involved prior to the launch of a search, we can assist with the design of the process to ensure that initial screening parameters are properly calibrated.

Universe Screening

A "long list" of potential managers is identified using third-party databases and/or an investment consultant.
Client-Conducted

Requests for Proposals

An RFP is issued, and proposals are accepted by open tender or solicited from the target list.
Client-Conducted

Qualitative Evaluation

Proposals are reviewed and analyzed. One or more rounds of investment and operational diligence meetings is conducted until a "short list" of 3 to 5 managers is identified.
Client-Conducted

Empirically Evaluation

We analyze the "short list" against client objectives, augment our written findings by videoconference or in person, and deliver decision exploration tools for the client's use.

Allocation Decision

A final recommendation is settled upon. The investment committee selects a manager and awards the mandate.
Client-Conducted

Empirically Review

We assist with periodic performance reviews by providing updated analytics as well as guidance on the desirability and timing of potential deselection decisions.