Investment Manager/Fund Selection

We seek to provide invaluable assistance in support of our clients’ efforts to assemble a management team with complimentary skills and little style redundancy, thereby offering strong upside participation and sound downside protection in volatile markets.

Chartwell conducts every manager search independently. Once we have identified key selection criteria with our client, the screening process begins against a full database (includes over 4000 managers). By starting every manager search with a screening of the full database, we do not “miss” a manager with a superior developing record. However, we’ve also found that various commercial databases are only a good place to start the search process. Accordingly, Chartwell regularly conducts due diligence meetings with 200+ managers/mutual fund companies annually. We evaluate managers by looking at the people, process, and performance of the overall firm and the relevant investment “product.”

Each search normally incorporates the following steps: 

  1. We use quantitative screening criteria first, to identify the best performing managers. In most cases, we favor managers with consistently good historical returns and risk statistics over an extended period. These firms have made more “correct” decisions over time than managers with spectacular, but inconsistent, short-term historical performance. As an indicator of future success, the former type of record is more predictive. Beyond this, we affirm additional quantitative screening criteria after client discussions. Examples of additional criteria include market coverage, investment style, and style drift.

  2. We then apply an extensive set of qualitative criteria to our list of top performing managers, including such issues as resource sufficiency, investment process repeatability, business management practices, and alignment with client goals.

  3. The quantitative and qualitative process sharply narrows the number of candidate firms. To qualify for further consideration, we expect each candidate firm to have completed a “request for information” (RFI).

  4. After reviewing RFI responses and conducting sufficient due diligence meetings, we provide our clients with a “short list” (usually 4-5) of recommended investment managers for their consideration;

  5. We facilitate the final selection process, organizing further due diligence visits and/or finals presentations as appropriate, and helping our clients negotiate service contracts.

Unlike other consulting organizations, our client fees must cover all costs of the manager search process. Chartwell Consulting does not accept any direct or indirect revenue from investment managers to be included in any searches we conduct on behalf of clients. Additionally, the manager databases Chartwell licenses do not require investment managers to pay any direct or indirect fees for inclusion or searches. Our manager recommendations are a function of carrying out the above process completely, and solely, in support of our client’s best interests.