Shoreline participates in the Risk & Performance Summit

2nd Risk and Performance Summit

Chris Robertson, Associate Director, moderated an insightful panel discussion on the significance of Performance & Risk function beyond the fulfillment of reporting obligations for Asset Management firms.

On 8th September, the panel discussed how investment firms can maximise the value of their performance functions to improve ex-ante insights and investment decision-making going forward. The panel outlined key practical ways in which teams can contribute to improved performance, they also highlighted some common hurdles and the technology solutions which can be leveraged to facilitate the feedback loop.

The session was chaired by Chris Robertson, other panel members were Danni Luttick from IFM Investors and Dean McIntyre from FactSet.

This event was attended mostly by senior risk and performance professionals.

Here are five key takeaways from the panel discussion:

  1. Evolution of the Performance team: The performance function within asset managers and asset owners has evolved drastically in the past decade as organisational and client demands have gone through a sea change. Portfolio Managers, CIO’s, Client Reporting teams and external clients are now demanding more timely information delivered digitally in interactive formats. All firms have switched to daily calculation frequencies for their listed assets performance. The days of hard copy or .pdf versions of monthly and quarterly reports are over. With the thrust on single source of truth for Performance numbers, the team also has to strike the right balance between data governance and accessibility of unaudited results to the right audience.
  2. Collaboration and active engagement: Performance & Analytics is no longer a siloed function. The teams are now collaborating and actively engaging with the front office teams in understanding investment strategies and then answering the questions around the key drivers of performance of the portfolios. They are now adopting a more pro-active approach while delivering attribution or ex-post risk metrics calculations for bespoke periods. Performance Analysts are also now writing extensive market commentaries. However, the collaboration with front office function is happening without compromising the integrity of performance calculations. At many firms, the Performance teams are still aligned with the Investment Risk function which is independent of the Portfolio Management function.
  3. Digital Transformation: Better investment data insights and analytics is providing an uplift to the investment decision process by giving investment managers a greater understanding of the drivers of return. Many firms have embarked on a digital transformation journey to drive more self-service capabilities around the data management layer and on-demand reporting visualisation for all external stakeholders of the Performance team.
  4. Soft skill expectations from a Performance Measurement team: The team needs to focus on their firm’s cultural foundations. Analysts should embrace an openness culture with a strong appetite for learning and sharing knowledge with fellow team members. The team should exhibit accountability and fairness in their reporting deliverables, and with their unique exposure to end to end investment processes they should position themselves as a voice of truth inside the firm
  5. Role of Technology as an enabler to the next generation Performance function: Technology is making great strides with higher processing power, enhanced analytics and interactive visualisation functionality but there are still some challenges around data connectivity between systems and the incorporation of exotic instruments into the performance analytics process. Technology vendors are considering strategic alliances with specialist data and solution providers to reduce their time to market in the alternative assets space.

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