Fund management: Managers in e-beauty parade
In most areas of financial services, internet technology has created efficiencies and levelled playing fields, allowing new entrants to compete with established players and bringing the benefits of price transparency to end-users.
But when the Queensland Investment Corp of Brisbane, Australia, pension fund used internet technology in the process of selecting a manager for more than $300 million in assets earlier this year, it marked the first time that new economy techniques had been applied to a long-unchanged market practice.
Rather than filing through numerous proposals from a range of money managers, the fund used technology to streamline the process of narrowing down the field to a short-list of candidates that suited the performance goals and investment preferences of the portfolio’s trustees and investors.
And although the fund’s overseers still applied the same due diligence to selecting the final candidate – in this case, PaineWebber Group subsidiary DSI International Management – the fact that they could easily identify best-of-breed providers enabled them to cut considerably the time it took to choose a money manager.
Indeed, the internet is transforming the beauty parade, and at the apex of change is InvestorForce.com. Barely 20 months old, the US-based company is bringing interactive database technology to manager selection.
“The process of selecting money managers hasn’t changed for 30 years – until now,” says Peter Flynn, InvestorForce.com’s London-based general manager for Europe.