Journal 1
This summer, I am working for Altura Capital, based in New York City. “Altura Capital provides institutional investors with customized manager-of-managers investment solutions, investment advisory and research services to search, invest, and partner with emerging and diverse managers.” Currently, Altura oversees the management of more than six billion dollars in assets and serves more than 12 of the largest institutional investors in the world. There are three business units in Altura: Asset Management, the Emerging Manager Platform, and the Emerging Manager DMI (Diversity in the Management of Investments).
Asset Management focuses on generating performance from new, largely un-tapped sources, specializing in emerging and diverse managers. The Emerging Manager Platform is a unique set of tools to give clients an edge in their investment portfolios. The Emerging Manager DMI is a strategic advisory service for trustees, CIOs, and decision-makers, which allows institutional investors to approach diversity in the management of investments in a methodical, results-driven manner.
This summer, I helped the chief investment officer and the director of research build a persistence scorecard based on manager performance in the Altura proprietary database. In many articles and investment fund marketing documents, there are statements that say past performance cannot guarantee future performance. My task was to identify how outperformance signaled the persistency of a manager’s long term or recent performance, using statistical tools and the data provided by Altura.
I was also invited to attend an investment committee, which evaluates emerging managers.
Journal 2
This is my third week of my summer internship. I am working on the persistence scorecard with the chief investment officer and the director of research. The database is massive, and I have spent quite a bit of time putting the data into a format that will allow me to apply the Excel formulas in a more systematic way. The IT person helped me a lot in this area. We had an hour training to introduce me to the interface of the database and the searching criteria.
The challenge of this project was that the hypothesis was not clear — there could be multiple periods of outperformance that could lead to outperformance in the most recent period. I simplified the process and performed an exercise that could help me identify which period of performance would be a good indicator of future performance.
Besides the normal projects, the director of research also gave me two 45-minute trainings to describe the investment process of Altura, including manager search, due diligence, manager evaluations, and recommendations. The process is very systematic and they utilize a multi-tier evaluation to determine whether the manager would be a right fit for our clients. They conduct research on individual managers in context, meaning that if they look at real-estate managers, they conduct research on the entire set, so that they have a good sense of the space. Their research leads them to form one of four opinions on a manager, ranging from negative to strong positive, with due diligence encompassing four levels of scrutiny. The highest conviction managers are then used to construct portfolios for their asset management clients.
