More than simply choosing investments based on past performance, asset class or style, MFP Strategies evaluates the qualifications and track record of some of the leading managers.
We evaluate managers using a five-step process:
Performance Screens & Quantitative Analysis
Past performance is useful only as a tool for identifying managers that may be worthy of further qualitative research. We take into account performance consistency, volatility, and other special factors.
Investment Manager Questionnaire
If a manager passes our performance screen, the next step is for the fund to complete our detailed Investment Manager Questionnaire (IMQ) to ascertain the firm's ability to continue its prior periods' performance success.
Investment Manager Interview
After reviewing the responses to the IMQ, we begin to qualitatively assess the manager's investment process, discipline in executing that process, focus on portfolio management and plans for managing growth.
Investment Committee Recommendation
We often share our findings with the investment committee so that they may gain a comprehensive understanding of the manager's investment process, their discipline in adhering to the process and avoiding style-drift, the sustainability of their competitive advantage, and the likelihood of future outperformance or circumstances that could contribute to under performance over time.
After a manager is hired, we continue to monitor the firm’s performance with regular dialogue to review significant developments and changes in the portfolio, the team, and the firm as we continue to test our original rationale for recommending the manager.