Keeping fees tight

In the new world, the production process is segmented between focused players working with low fees / large volumes

New World Old World

Building the Investment Process (IP)

Long term research effort (>3 years). Built by a team of specialists. « The Research Lab ». Mark Registered / Process Patented (?)

Selecting a Portfolio Management team

Relying on the skill and the expertise of the Portfolio Management Team

Reviewing the Investment Process and controlling for the Operational Risk

A Global, High Reputation  Company reviews the IP end to end, sets operating standards and puts its brand on it as a stamp of approval. (Delegated Monitoring)

Execution and operations

Driven by the Portfolio Manager and his protected know-how.

Separating the Investment Process Delivery from the Production Environment

The Production Environment Is at Arm’s Length from the Investment Process. The Performance Drift between the two is constantly monitored

Heavy Middle and Back Office Involvement

Booking, slippage minimisation, best execution, reporting, liquidity review

Organised, large scale Distribution

Two levels of Sales Due Diligence: Sell the IP to the Product Sellers, then Sell the Product to the end client.  The client benefit: buying  a very clear Investment Process for  tight distribution fees

Bespoke Distribution

Selling the reputation of the portfolio manager and his past performance (Morningstar Stars). The client benefit: buying « Best in Class » reputation at a cost commensurate with the perceived skill.