Unless you have a precise and comprehensive analysis of the investment process, improving the return becomes a hit-or-miss process.
If you lose one of the key staff, investors may be unhappy unless it is clear that the current investment approach will be maintained. This is only possible if the current process has been rigorously documented.
Origo Consulting can help you with a report describing in detail how the process works. We look at how specific investment procedures are deployed and on the elements where a portfolio manager relies on experience and instinct. Our purpose is not to criticise, but simply to map how the performance can attributed to procedure and how much comes from talent. As an example, regular outperformance compared to a large cap index. In many cases, the outperformance is due to the portfolio manager taking a visible position in midcap stocks that have performed large cap stocks regularly – and not in the selection of individual stocks. The stock selection may in fact have contributed negatively to the performance.
Such observations will increase the understanding of the strengths and the weaknesses of a given investment approach. We will always make two on-site visits. One visit to interview the portfolio managers and one visit to discuss our findings.
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