Overview

Practitioners in the investment management industry strive to identify firms that they believe will prove "superior" over time. Generally, investment managers are analyzed using two types of tools: 1) those based upon the quantitative examination of past portfolio results and 2) less easily measured concepts such as philosophical or cultural fit. However, the latter tools tend to be based on subjective opinions that are difficult to apply consistently over time and when comparing different firms.

While the investment industry will continue to focus on statistical calculations of readily available, results-oriented data, the InvestmentQ ™ team believes that "easy to measure" is not always synonymous with "useful."

Originally, the InvestmentQ ™ team sought a quantifiable measure that focused on the culture and organization decision-making process of investment firms, not just on performance results. The team concurs with the view that if a suitable organizational culture and process are in place, then solid results likely will follow.

In seeking a method that would quantify subjective, cultural information, an analytical approach was sought that would:

• Be rigorous in statistical methodology
• Be able to differentiate the cultural characteristics of different firms
• Be applied consistently across a representative sample of investment management firms
• Be able to be applied over future periods, to measure subsequent changes
• Have been tested and found to work in fields outside investment management

Such an approach is thought to provide benefits to clients, consultants, and investment managers.