There are many
books available on investment management, but few take more than a passing look
at the search process with which institutional investors hire investment
managers. With this book, Travers addresses this need.
Hiring a manager
is a lengthy process that entails, among other tasks, identifying requirements,
screening databases of managers, requesting information from those managers,
detailed analysis of specific managers, and on-site visits. Travers walks
readers through the entire process. He offers samples of letters, requests for
information (RFIs), and contracts. He details basic computations for performance
analysis and attribution. He lists interview questions. He delivers a
how-to guide for plan sponsors and other institutional investors.
The book is
divided into three sections. The first comprises three chapters covering the
preliminary steps of a search—identifying needs, compiling a list of candidate
managers, and requesting preliminary information. These tasks are pretty much
the same for all searches.
Contents
1. Setting investment guidelines
2. Investment manager sourcing
3. Request for information
4. Performance analysis
5. Risk analysis
6. Portfolio analysis
7. Information gathering
8. Initial interview
9. Attribution analysis
10. Style analysis
11. On-site meeting
12. Investment manager scoring model
13. Background checks and contracts
14. Fixed income manager analysis
15. Hedge fund manager analysis
The second part
has eleven chapters and forms the heart of the book. It explores the many tasks
associated with analyzing and selecting traditional equity and fixed income
managers. Topics include: information gathering, performance analysis,
interviews, background checks, contracts, and much more. Travers also describes
investment manager scoring models.
The final part of
the book is a single chapter on hiring hedge fund managers. Travers works as a
fund-of-funds manager, so this is an area of particular expertise for him.
This is an
outstanding book, especially for professionals with little or no experience with
manager searches. More seasoned professionals will already be familiar with much
of what Travers says, but they will still benefit from a quick browse. Every
institution should have a copy.
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