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Rich Todd, Managing Principal & Co-Founder
Manager and product due diligence must go beyond examining a manager’s track record. This approach is not news to most good firms in the investment consulting industry. Qualitative issues must always be considered, including manager tenure, philosophy and process, and firm health, to name a few. However, an often overlooked, yet critical, element of due diligence is evaluating the quality of a manager’s advertised track record or “composite.” A composite is the aggregation of all accounts that are managed in a particular strategy by a money manager. Because attractive track records can lead to inflows of more assets, and consequently income to investment firms, at Innovest we believe that it is not uncommon for investment firms to embellish their performance.
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