TAKING THE REINS

Defining Key Performance Indicators (KPIs)

Institutional investors are increasingly looking at all aspects of their asset manager, ranging fromperformance to operational ability to the level of reporting that they receive. While other factors were considered important, such as innovation or team stability, they didn’t feature as frequently or rank as highly as the other responses. What emerged during our analysis (as explained previously) was the recurrence of eight key themes which featured highly across all the responses (see Table 1).

We have selected these eight KPIs as the key drivers in an institutional investor’s relationship with asset managers because of the need for asset managers to satisfy these criteria to maintain and secure institutional assets. As a result of these clear trends emerging, our evaluation is based upon the extent to which institutional investors’desires are being met and how they might improve upon them to increase their attractiveness.

Table 1

Identified KPIs

KPIs

Reasons for

Drivers of

Reasons for

selecting asset

overall

replacing asset

managers

satisfaction

managers

• • •

•

Performance (or lack of)

Risk transparency

Expertise

• •

Fees

Quality of reporting

• • •

Operational strength

Quality of advice

Independent verification of controls and procedures

of asset managers

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