Paul Ilott, managing director of the Leicester-based firm, says the research is aimed at the multi-managers themselves as well as those intermediaries who “advise clients on, manage, or have other interests in, unfettered multi-manager funds and mandates”.
The ratings methodology uses a scale from A* to F giving users an idea of the quality of the overall portfolio including a forward-looking risk rating rather than the more usual backwards look at risks through quantitative analysis.
The Scopic Multi-Manager Portfolio Ratings give a single rating for the overall portfolio quality as well as individual ratings, using the same scale of A* to F, awarded to six out of the ten research topics covered in the due diligence reports. The research topics awarded ratings are:
- manager and team;
- infrastructure and support;
- investment approach;
- analysing the past;
- reporting;
- expenses.
Ilott added that over time a ‘snail trail’ will show how the ratings change to overtly show any improvement or deterioration.
To date, multi-managers researched and soon to be awarded ratings by Scopic include:
- Thames River Multi-Capital;
- Legal & General;
- Cazenove Capital;
- Premier Asset Management;
- Blacksquare Capital.
Research has also been completed or is in the process of being done:
- Henderson Global Investors;
- Apollo Multi-Asset Management;
- Rathbone Unit Trust Management;
- 7IM.
Ilott said: “Our due diligence-standard qualitative reports and ratings will enable intermediary firms to clearly demonstrate, both to an internal audience and to the regulator, that intensive research, based upon face-to-face interviews with the relevant fund manager, has been conducted – if not directly on their behalf, then with an intermediary audience in mind.
“We’re aiming to deliver greater transparency into how unfettered multi-manager solutions are managed and, by raising the standard of research materials currently available to the intermediary market, enable them to better differentiate between portfolios.”
Ilott was formerly head of communications for Fidelity International’s multi-manager business, prior to which he was head of communications and a member of the research team at Bates Investment Services that later became Honister Partners Limited.
