IMAC Lecture - Manager Search and Selection

David Wright, Zenith Investment Partners  |  Ron Bird, ANU & Portfolio Construction Forum

About this Lecture

This lecture instructs IMAC candidates on the principles of fund manager search and selection as it relates to identifying quality managed investments for possible inclusion in portfolios including:

  • sources of information when conducing a fund manager or fund search;
  • investment management styles across asset classes;
  • the strengths and weaknesses of diversified and concentrated portfolios;
  • how to assess a portfolio manager’s skill by applying quantitative and qualitative filters;
  • the limitations of quantitative and qualitative fund analysis;
  • how a research methodology is constructed and the different elements of a research methodology;
  • the underlying principles of factor investing
  • analysing, monitoring and explaining fund and portfolio performance;
  • the potential reasons for terminating a manager;
  • the ongoing manager monitoring process.
  • comparing a manager’s preferred stock selection against a concentrated portfolio using their conviction weights;
  • the different factors that impact a fund’s performance; and,
  • the findings from a study about forecasting factor models.

About the Lecturers

David Wright is Managing Partner and a joint founder of Zenith Investment Partners, the managed funds research business he established in October 2002. David has overall responsibility of the business, and remains closely involved in servicing the firm’s investment consulting clients with model portfolio construction, management and monitoring advice. David has over 22 years of experience researching, assessing and rating all forms of managed investments. Prior to establishing Zenith, he held a position as Head of Research at IWL Ltd, an ASX-listed company, where he was responsible for managing a team of managed fund and equity analysts with the objective of producing investment research and ratings/recommendations for advisers and members of the firm’s retail investment website. Other prior roles included positions as Associate Director and Head of Managed Funds research at Lonsdale Limited, a national financial planning and stock broking group, and a position as an investment analyst with the Advisor Group, also a national financial planning group. David is also a former practitioner lecturer of the Securities Institute of Australia (now FINSIA).

Ron Bird is Professor Emeritus of Australian National University and Director of Portfolio Construction Forum’s Investment Management Research Program. Ron has worked in academia and industry. Early in his academic career, he was head of the Commerce Department of Australian National University (ANU). He joined industry and was head of the asset consulting practice and the global research unit at Towers Perrin; head of quantitative techniques for funds management at Westpac Investment Management; and, co-ordinated global research activities for Grantham, Mayo, Van Otterloo (GMO). He returned to academia in 1999, with University of Technology Sydney (UTS) where he taught honours and masters subjects in corporate finance and investments, and coordinated the School’s honours program. He established the Australian arm of the Investment Management Consultants Association (IMCA) and convened the first IMAC course in Australia in 2001, continuing to do so each year until 2016 when Portfolio Construction Forum took on the management and delivery of the CIMA program in Australia, at which point Ron continued as course director. More about Ron.

Instructions

  1.  Read the textbook chapter(s) and paper(s) listed below.
  2.  Download the slides (using the link above the video) and print them, so you can take notes as you’re listening.
  3.  Watch the two lectures. You can speed up or slow down the video using the settings in the control bar. If you leave the lecture part way through, note down the time because it won’t “remember” where you were when you return.
  4.  Have your say about each lecture. Complete the questions at the end of the page (your answers are confidential to the Forum and only anonymised, aggregated data is provided to lecturers).

IMAC Lecture:  Manager Search and Selection

Essential reading(s)
- IABOK - Chapter 20 (p1049-1082)

Additional reading(s)
- Diversification versus Concentration… and the Winner is? (Bird)
- Seven Sins of Fund Management (Dresdner Kneiwort Wasserstein)

Lecture 1  (1 hr 40 min)  |  Slides (PDF)  |  Slides (Word)

 
Lecture 2  (1 hr 11 min)  |  Slides (PDF)  |  Slides (Word)

What’s your view?

Please answer the following questions (your individual answers are confidential to the Forum and only anonymised, aggregated data is shared with the lecturers).