The Methodology
Zenith offers its clients access to those investment managers identified as "best of breed" through a comprehensive, multi-dimensional selection process. The selection process is rigorous in both its qualitative (subjective criteria) and quantitative analysis (numeric criteria).
Sector Universe & Screening
The research team begins by identifying funds available to advisers via the major wrap platforms and master trusts. In addition to the collection of data and monitoring of these funds, Zenith monitors alternative and emerging boutique managers which are not widely covered on mainstream commercial databases.
They then split the asset classes and sub-asset classes and screen their sectors quantitatively. Zenith selects a list of leading contenders who pass the initial screens, including performance, consistency and risk statistics as well as returns based style and attribution analysis. All quantitative measures are examined over multiple rolling time periods. For comparison purposes, managers are reviewed amongst both their peers within their sector, but also importantly with other managers of the same style.
The research team consider factors which could impede the most attractively ranked funds from repeating strong returns generated in the past. Examples include organisational issues or major staff changes.
Due Diligence / Manager Review
Once the contenders list has been finalised, more detailed due diligence is undertaken with the investment manager to understand everything from its overall philosophy and process to the quality, experience and track record of the investment team. This is achieved through detailed face-to-face manager interviews, a thorough review of all documentation and an in-depth "look under the covers" with respect to the portfolio.
Zenith then focuses on the research process including the structure of the investment team, information resources, investment philosophy, investment process, portfolio construction and risk management.
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