Managing the Managers

Establishing a global portfolio business from 800 misunderstood funds

Background:

A major global private bank had 800 funds on its platform, all approved for sale, that remained unsold because there was nobody who could extract the true worth from such a vast array of opportunities.

Situation:

I identified this as a major source of revenue by establishing a manager selection process that could objectively recommend specific funds, both for direct sales and for model portfolio construction.  Elegant and yet well-performing portfolios could be created that could capture diversified and specific returns from most major and emerging markets.  We could provide an almost infinite range of geographical and sectoral permutations in a variety of major currencies.  Better still for the bank, these portfolios were very inexpensive to create but would generate revenues at current market levels – essentially expanding margins by slashing costs.

Action:

A fund manager selection process was established and a quantitative model was built that enabled us to monitor the 800 funds in real time.  We carried out detailed fund manager research by visiting all of the fund houses with funds on the platform and assessed their worth according to the exceptionally high-standards that the bank required.  This work was very technical in both a qualitative and quantitative sense.  A wide variety of funds were made available to the sales force that were cheap and liquid for clients to buy and provided them with very specific exposure to investment areas which were hitherto inaccessible to our clients

Result:

The work created great value to the bank’s product offering in this area which was previously greatly underutilised.

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