Auckland-based consultancy and investment governance advisory firm, MyFiduciary, has opened up a new service offering bespoke fund manager reports.
Chris Douglas, MyFiduciary principal, said the firm has completed a handful of in-depth reports following requests from Australia-based managers looking for research coverage in NZ.
However, Douglas said the fund manager-commissioned reports are designed as thorough operational and governance due-diligence comparisons, not as a rating or recommendation.
“We look at things like investment process, team strength, compliance, governance and back-office capabilities,” he said. “We don’t focus a lot on performance.”
The MyFiduciary bespoke reports measure fund managers against the Fi360 best practice standards championed by the research firm.
Douglas said the commissioned studies remain separate from the MyFiduciary fund manager research that feeds into the group’s model portfolios used by many NZ financial advisory firms.
“We don’t use these reports to make sell recommendations, for example,” he said. “But if a fund does have shortfalls [against the best practice standards] we would make that information available to our clients.”
To date, MyFiduciary has published three or four of the bespoke reports including for Australian global equities growth manager, Hyperion Asset Management.
Among several conclusions, the Hyperion assessment by MyFiduciary notes: “We have no concerns regarding Hyperion’s business structure, key personnel, operations, investment process and internal monitoring framework, and find that the investment management and operations of Hyperion are of a high standard, as we would expect from a quality fund manager in the Australian market.”
While the prospect of managers paying for research always conjures up conflicts-of-interest, Douglas said the focus on best-practice comparisons instead of performance-based ratings offering buy-or-sell recommendations is a key point-of-difference.
To date, MyFiduciary has produced reports only for offshore-based firms but he said NZ managers might also find the approach useful.
“I think NZ fund managers would benefit from seeing how they stack up against best-practice investment governance standards in a global framework,” Douglas said.