Asset Management Performance Analysis and Attribution: Specialists and Platform Vendors

by Jay Wolstenholme, March 27, 2017
Product Trends/ Reviews
Global

Abstract

Performance analysis and attribution is a top of the list requirement for asset managers to demonstrate their value. Performance analysis is crucial not only in the investment process but increasingly for solid client communications and marketing in an ultracompetitive institutional client market.

Celent has released a new report titled Asset Management Performance Analysis and Attribution. The report was written by Jay Wolstenholme, a Senior Analyst with Celent's Securities & Investments practice.

Performance analysis and attribution is a top of the list requirement for asset managers to demonstrate their value. Performance analysis is crucial not only in the investment process but also for solid client communications and marketing in an ultracompetitive institutional client market.

Performance analysis tools have always been part of the investment process, but today more sophisticated, quantitative, cross-product tools that are compliant with Global Investment Performance Standards (GIPS) are available from vendors meeting the new demands of asset managers.

Equity attribution variables continue to expand as asset managers develop new types of smart beta portfolios that blur the lines between passive and active investment styles. It is important to both asset managers and investors to be able to assess the performance components of all detailed factors to ensure that performance alpha is being achieved through the adjusted weighting of factors (versus just luck or chance).

“In today’s investment environment, asset owners are gravitating toward asset managers who can quantitatively outline their performance achievements, starting with aggregation, drill down to contribution and attribution detail, visualization graphics, and increasingly mobile and configurable access,” commented Wolstenholme.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

 

Key Research Questions

3

The Increased Importance of Performance Analysis and Attribution

4

 

Top-Down Analysis of Performance Analysis and Attribution Within the Buy Side

5

Brief Performance Attribution Review

8

Technology Options and Specialist and Platform Vendors

11

 

Asset Manager Categorization

14

Specialists and Platform

17

 

Specialists

17

 

Platforms

18

 

A Word About Asset Owners and Their Growing Need for Reporting

18

Conclusion

20

Leveraging Celent’s Expertise

21

 

Support for Financial Institutions

21

 

Support for Vendors

21

Related Celent Research

22

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