I suspect it was the title of this review Shining a Light on Shadow Searches by einvestment which first grabbed my attention. However, the content was also of interest. It really brought home to me how mechanised the whole search for suitable investment funds has become and also how hopeless it must be for those not fully updating the databases in a timely and professional way.

Consultants and investors are now using the open RFP less to guide their searches and relying much more on the data providers to carry out the initial sifts. These databases have become much more detailed and sophisticated in their parameters to search cutting down a lot of the leg work that people may carry out.

Cerulli Associates report that 81% of Consultants polled have an approved list which may only be reviewed every quarter. The small balance of 19% may start each search from a broad universe. In any one sector of the market there may be a whole range of funds which can be whittled down from the long list to a concise list which is manageable. These initial filters may include inception, fee information, administration costs. From this narrower data base specific subjects like ESG Information may then be screened, GIPS Compliant and audited. A database may now have details on the portfolio manager and their history and the team around them. So quickly a mechanised short list is constructed.

In many cases those that get screened out do so because of a lack of up to date data. Firms that fail to update their records they quote within 45 days of the end of a quarter miss out on 18% of all screenings which would be a total of over 500,000. If not up to date by the 75th day nearly 2 million screenings would have been missed on einvestment.

Multiply these numbers including the other databases and it goes to show why getting information out and in place and in a timely manner may well be becoming more important than the quarterly review. The consultant or investor wants to be able to review on all aspects of your business as quickly and easily as possible. Its not about performance of the fund so much as performance of the Manager to be as transparent and open.

Perhaps then one day you might enjoy the surprise that you find you are on a shortlist and you didn’t even know that you had reached that round to come and pitch for the business. Better this than the shadow searches going on and you never knew.

Tags:   Business   Opportunities