Tightening up the Investment Process

Your Investment Process is the bedrock of your competitive advantage. 

We show how to leverage it.


On this page:

 

Why tighten up your Investment Process?

 

Broken windows

A few team members not sticking to the process causes others to follow. This typically results in "Broken Windows" where eventually no-one adheres to the process. The competitive advantage inherent in the Investment Process is eroded.

 

Cognitive bias

There are numerous biases (such as confirmation bias and recency bias) that can subtly manifest themselves during investment analysis. These biases are difficult to avoid without a systematic approach to the overall Investment Process and without ensuring the team is actually adhering to that process.

 

Guidance

Often there is no time to mentor junior analysts or senior analysts are on the road and unavailable. This results in curtailed knowledge transfer.  Further, new senior team members bring their own methods and processes that can dilute the existing Investment Process, if they are not continually reminded of your team's approach.

 

Idea meritocracy

Without a systematic Investment Process, idea meritocracy does not flourish. Personalities and rank can distort the decision making process.



Approaches

Here are 7 things you can do to tighten up your Investment Process

 

Emulation

Part of being a successful team is replicating what you know works well. Emulation capability gives guidance to junior team members.  Emulation is also a learning multiplier as the experience of senior members are encapsulated.  This significantly increases team capability.

 

Visibility

Ensuring visibility on all the steps of the Investment Process provides a robust self-governance architecture. We have found this to significantly increase adherence to the process.  Visibility will also be valuable for asset consultants and clients that increasingly request live views into the Investment Process.

 

Relevancy

The systems need to be relevant to the team and their strategy.  Filtering out the noise from the process ensures the team can focus on the steps yielding the most value.  Process relevancy increases team engagement and is a capability multiplier for your team. 

 

Usability

Investment Process systems that are easy to use, fast and can work over multiple platforms will have greater utility within any team. Having tools that can be used during analyst meetings, on the go or as information comes to light increases compliance.  This mitigates 'Broken Windows" as the entire team want to use the Investment Process systems.

 

Integration

By integrating your quant analysis with your qualitative and ESG scorecards into a unifying platform, your team has a holistic view of each security.  This translates to enhanced clarity for portfolio managers and is directly correlated to better investment decision making.  An integration approach also reduces the need for users to search in multiple places for core research, increasing productivity.

 

Agility

The Investment Process needs to support ad-hoc analysis within the systematised framework. It needs to have the flexibility to adjust or adapt the process over time.

 

Systematisation

Look for ways to be systematic with the Investment Process. This distills your competitive advantage and learnings into a system and reduces key personal risk.

 


Why teams struggle to tighten up their process?

 

 

Legacy systems

Slow or 'clunky' systems with poor user interfaces means existing systems are avoided. Research and analysis start being stored in multiple locations. Over time, team members stop using the provided system and use their own ad-hoc methods. Overhauling and unifying these different legacy systems becomes a complex task for teams so the problems continue to compound.

 

Disparate processes and systems

Teams are often at a loss on how to reconcile both the knowledge transfer and mentoring aspects with their Investment Process.

 

Complexity and skill set

Teams often do not know where to start in tightening up their Investment Process.  It becomes perceived by team members as an insurmountable task.  Teams also don't have access to specialised capabilities that can help them navigate their existing processes and move towards a consolidated solution. 

 

Priority

Tightening the Investment Process is usually not a high priority until asset consultants start requesting live views on the process.

 

Resistance

Team members fear it will negatively impact their workflow, resulting in more work for them.

 


How Calibre Can Help

Tighten-up your Investment Process with a purpose built platform used by top-tier funds

Process Builder is our new SaaS based platform for your Investment Process.

Process Builder gives you:

 

 

Helicopter Views

Process Builder gives teams a holistic view of all quant and qualitative data.  This ensures that nothing is missed in the analysis and allows portfolio managers to make effective investment decisions quickly.

Portfolio managers and other team members get live notifications of any changes to the view, such as changed scorecards or analyst meeting notes.

 

Why is this important?

Visibility - By providing a helicopter view of each security, teams get real-time visibility on the Investment Process.  The visibility that Process Builder provides has been designed to completely remove the "Broken Windows" inflicting many teams.

 

Video: Tighten up your Investment Process with Helicopter Views.


Customised Investment Process

Process Builder can be fully customised to your unique needs.  It is a next-generation enterprise SaaS platform built for your Investment Process.

Whether it is a long/short equity fund, a REIT or a global macro fund, Process Builder lets you define and configure the relevant steps in your process.  Your team does not have to be 'stuck' with legacy systems or solutions that are not fit for purpose.

Avoid the long development time-frames and capital investments.  Calibre costs a fraction of the true cost of in-house solutions.  Teams start leveraging the benefits immediately.

 

Why is this important?

Integration - Process Builder integrates all aspects of your Investment Process into a single platform.

Relevancy to your process - only the steps and factors you have identified that adds value are used.  Your team will only see the relevant news feeds and updates and not get overwhelmed by information flow.  This leads to increased team engagement and ensures that everyone is following the required steps of the process.

Branding - Your Investment Process is a core differentiator in the market.  Process Builder helps your team show in real-time ('live') how your process is used.  This serves as a powerful communication tool when meeting consultants and clients.

 

Video: How to leverage your customised Investment Process.


Scorecards & qualitative data

Process Builder gives teams a flexible framework to undertake research.  Scorecards and templates can be configured to reflect your unique Investment Process.

Process Builder lets teams use unique scorecards that are relevant to their Investment Process.  These flexible scorecards increase team adherence and leverage to the process.


Why is this important?

Systematization - scorecards systematise the qualitative aspects of your process. For example, you can mandate that a bear case is always considered by adding it as a scorecard to your process. Before a security can progress to the next stage, analysts will be required to enter a bear thesis.

Visibility - if scorecards are not filled or updated, team members are automatically notified that it is out of data and needs a review.

Integration - avoids the issue of disparate systems being used for some analysis.  Integrate your qualitative scorecards and checklists with your financial and quantitative analysis.

 

Video: Using rich scorecards for qualitative data in your Investment Process.


Mobility & Ease of Use

The easy to use, minimalist design of Process Builder is focused on the unique stages of your teams' Investment Process.  Irrelevant distractions are filtered out so the user can focus on the analysis.

The responsive user interface works on desktop, mobile and table devices.  Process Builder has been built for speed using scalable and secure enterprise SaaS micro-services architecture. Mobility ensures the Investment Process is with analysts wherever they go. 

 

Why is this important?

Usability - By being easy to use and available on mobile devices, team affinity and leverage of the analysis is increased. This removes the "Broken Windows" predicament many teams have.

Integration - Facilitates the nexus of qualitative data from analyst meetings with quantitative data for holistic decision making.

 

Video: Tighten up your Investment Process with a mobile-ready and easy to use platform.

 

Contact us to learn more

To learn  about how Calibre can help your team, contact us for a demo or a free trial.

 
 

Why Calibre?

At Calibre we have been helping asset managers with their research and investment processes for almost 20 years. Our expertise is used and trusted by top-tier fund managers because we are a proven solution that they have worked with over time.