Crescentem's manager selection process reflects the cumulative experience and wisdom of our team. We employ a disciplined and consistent process to select investment managers most suited to capitalize on identified long-term and short-term market opportunities. The ultimate objective of our process is the incorporation of emerging as well as established managers in institutional investment programs to generate superior risk-adjusted returns.
Our approach utilizes both qualitative and quantitative factors which are considered in tandem with knowledge gleaned from our keen market understanding and over two decades of relationships with investment teams on both sides of the table.
While our selection process may vary somewhat from one investment manager to another - in adaptation to the particulars of investment strategy and other nuanced considerations - the following factors serve as guidelines:
Capital preservation is the cardinal mandate. Ignorance in matters of risk-taking that leads to catastrophic losses is always preferable.
Risk management is the focal - starting - point of alternative investment management, not benchmark comparisons. Risk integration methods help build stronger portfolio foundations.
Consistent capability to capitalize on market inefficiencies and the fundamental mispricing of securities demonstrates uniqueness of strategy and excellent technique.
Sustainability and scalability are the hallmarks of a well-thought-out investment philosophy.
Sound investment and execution strategies are embedded with methodical security selection, portfolio construction and trade execution.
Portfolio construction must be aimed at outperforming under a range of future scenarios i.e. no dependence on unidirectional forecasts regarding any variable that drives performance returns.
A seasoned trading desk with rapid vetting of time-sensitive market opportunities provides an edge.
Adequate resourcing of compliance, accounting and legal departments is essential as is an emphasis on a system of checks and balances.
A microscopic understanding of the ownership structure and the pecking order, and their alignment with investor goals.
Exploiting market inefficiencies ought not to amount to exploiting others. The types and level of employee attrition lay bare the true nature of corporate culture. Attrition is an easy litmus test. The broader purpose of investing requires a fundamental recognition and profound appreciation of the various points of intersection between investing and society. The right thing to do is always the right business thing to do as well.