Open architecture model
A key component to our solutions offering is our multi-manager platform. We have adopted an open architecture approach, ensuring that clients can access institutional-calibre managers, whether they be part of Columbia Threadneedle or external.
Our multi-manager team takes responsibility for all mandates incorporating third party managers across insurance, variable annuities, institutional and retail portfolios, as well as US college savings plans.
Manager research team
The multi-manager portfolio team manages around 50 customised institutional investment strategies in active and passive equities, fixed income and alternatives¹. A background in traditional public, alternative and private markets informs the team’s insights into the managers they cover and into the portfolio construction process. In 2018 approximately 250 strategies from a candidate universe of thousands of managers were reviewed.
In addition to traditional investment approaches equities, fixed income and alternatives, the team also researches newer capabilities such as data science approaches incorporating machine learning and artificial intelligence.
In selecting managers, an initial screening process is performed, followed by detailed information gathering on people, process and philosophy.
The screening process is two-fold. A proprietary multi-factor quantitative model incorporates parameters that describe a client’s requirements so that inconsistent funds can be eliminated. A qualitative assessment is also conducted alongside portfolio analytics to determine the level of fit of a given manager within the desired objectives.
The next stage of the process includes conference calls, detailed requests for information as well as onsite due diligence. Operational and compliance due diligence is conducted separately and is a crucial factor at this stage.
The findings from the analyses and visits are synthesised in a team discussion which ultimately results in allocation recommendations to managers that best meet the client needs. The underlying investment thesis then forms a key component of ongoing monitoring. Any subsequent change in investment process or philosophy by the external manager triggers a thorough review and, in some cases, the termination of the mandate.
¹As at June 2019