Describe how you measure, track or otherwise demonstrate your value on manager selection and monitoring services.
We demonstrate the value of our manager selection and monitoring services for each client by reporting on its managers. For each manager appointment, we measure the investment return of the portfolio and, where applicable, the benchmark return as a comparison. The objective of the manager varies across asset classes, mandate-type and manager.
For active mandates in an asset class with a well-constructed index or other comparator, we evaluate whether the manager has added value through investment performance in excess of the index and done so within expected risk constraints.
For other mandates, we add value primarily through risk control and demonstrate this through monitoring factors such as: volatility of investment return (as a proxy for potential of loss); consistency of the achieved investment returns with the stated investment process; operational processes and controls being followed; changes to senior investment staff; changes to third-party service providers; changes to investment process; and changes in the approach to responsible investment.
Each client is provided a regular, usually quarterly, report highlighting these performance and risk monitoring indicators.
As part of a tender, when the services offered and the client circumstances are appropriate, we may provide prospective UK pension scheme clients with an analysis of the performance of our average client compared to its liabilities.