The TEXPERS Blog

Best Practice in Money Manager Search and Review

By Albert Reiter, Guest Columnist

The days following the issue of an RFP, the loads of boxes sent by respondents might seem to be an inevitable part of your office interior for quite a while. In fact, it is just as avoidable as keeping your savings in a mattress instead of opting for an online bank account.

Due to simplification of the search process using digital technologies on investRFP, pension funds can conduct multiple RFPs and money manager reviews at the same time with ease. The platform was invented to support best practice implementation in the RFP and money manager Peer Group Review process, thus increasing the time- & cost-efficiency through advantages listed below.

Key benefits:

• unbiased access to the money manager universe (1700+ companies connected; no investment advice/management on our part);
• most up-to-date money managers’ responses only to the questions asked by the request issuer, avoiding database constraints, costs and obsolete information;
• easily customizable industry questionnaire templates for optional use;
• automatized ranking calculation based on request issuers' weightings & scores;
• optional evaluation of responses on issuer team level (staff, investment committee and board members);
• comparison of all answers to a particular RFP or Peer Group Review question in one go;
• message system on Request level to communicate with money managers within the communication period defined by the Request Issuer;
• customizable one-click standard reports (e.g. tables of aggregated key data, performance and risk parameters, fees, etc.);
• optionally add colleagues or invite external advisors to join the team for a specific Request;
• RFP/Peer Group Review data availability online anytime and anywhere;
• all investRFP services are free of charge for Request Issuers. Managers are charged a standard 300$ fee per Response.

How does it work for pension funds and investors?

STEP 1: Create a Request. Once the pension fund has determined its unique search requirements, the fund and optionally the consultant can start a Peer Group Review, followed by a concrete RFP. If an ad hoc RFP fits the needs better, the same process applies. The platform can be used for any type of legal structure, asset class, data format and pension fund size.

STEP 2: Submit Request. Over 1700+ money manager companies in 68 countries will be notified by the platform, except for the ones which were specifically excluded by the request issuer on the level of the particular request.

STEP 3: Analyze Responses individually or as a team, using diverse scoring features and weightings set by the evaluation team.

STEP 4: Confirm the shortlist and provide feedback to money managers. The platform can be used until the shortlist submission which represents the last step on investRFP. We don’t intervene at any stage of the search process.

The flexibility of the platform has proved itself supporting prominent institutional investors in Europe and lately also in Texas, thus fostering best practice implementation, as well as simplifying the portfolio review and RFP process. Frequent portfolio reviews conducted in a structured way improve the overall efficiency of fund management, enabling the fiduciary duty aware pension funds to optimize their search method at no additional cost.

About the Author:

Albert Reiter, CFA, is the CEO investRFP.com.