Tools To Help Your Clients
Manager Selection & Due Diligence
Fortigent is committed to providing our advisory clients with the most effective investment solutions available, and we believe this is best facilitated via an open architecture investment platform. An underlying philosophy of our manager search process is to recognize that most affluent investors have irreplaceable wealth. In other words, these investors are beneficiaries of a high income career, a personal liquidity event, or an inheritance. Their primary investment objective is to protect their capital and have it grow at a reasonable rate without taking unnecessary risk.
Our manager selection process focuses on what we call the "5 Ps":
| People | Philosophy | Process | Performance | Portfolio |
While good performance is essential, we believe that if we find the right people with the right investment philosophy and an appropriate process for implementing that philosophy, good performance will follow. Recognizing that there is no such thing as the best manager, we also pay close attention to how an individual manager fits within an overall client portfolio.
A rigorous five-step process is used to identify investment managers we believe represent a given asset class or investment style and who have a high probability of repeating their excellent historical performance.
Our due diligence includes the following:
Step 1 ► Quantitative Screening
Step 2 ► Style Screening
Step 3 ► Risk Statistic Analysis
Step 4 ► Qualitative Analysis
Step 5 ► Ongoing Review of Select Managers
Typically, performance is examined over 3-year, 5-year, 10-year, and "since inception" periods to ensure that recent performance is not given too much consideration. Fortigent does not believe in chasing current hot managers. Instead, we prefer consistent out-performance over long periods. Additionally, we conduct on-site visits and in-depth telephone interviews with all potential managers. Fortigent will not make a recommendation until we believe we know the manager completely.
Our due diligence does not stop once we select a manager. We meet or speak with each manager several times throughout the year and every factor from our initial screening and analysis is continuously reviewed and scrutinized. Fortigent runs a tightly controlled watch list, and all manager-related decisions are reviewed and ratified by our Investment Committee at least annually. This committee comprises senior research and consulting professionals, members of the executive committee and, when appropriate, outside investment professionals. The mandate of the IC is to set the strategic investment philosophy for the firm, evaluate new ideas and methodologies, and discuss changes to our strategy or manager line-up. The committee also serves as an ongoing oversight body to our process for conducting research.
