DiligenceVault SuperbOwl Edition: Bring Your Secret Sauce to the Big Game!
Heidi Thompson, CFA's picture

DiligenceVault SuperbOwl Edition: Bring Your Secret Sauce to the Big Game!

By Heidi Thompson, CFA On 02 February, 2018

This weekend’s football game of the New England Patriots vs. the Philadelphia Eagles marks the biggest sports-centered holiday in the US, replete with office pools, parties, beverages, foodfests, the cultural karma of the commercials and the half-time show, and a great deal on a mattress – something for everyone! But the main attraction is the story of high performance and a great contest of champions that has already been hyped into legend.

As exhibited by chicken wings, pulled pork and nachos, there are lots of great ways to satisfy an appetite. The Big Game serves as a reminder that we are all players in the contests that are our livelihoods. How can any of us leverage our game to ensure the greatest probability of success? Leverage comes from productivity, and productivity depends on focus and technology. Like with the ads during the game, those who are not current are eclipsed by those who are.

Secret Sauce Recipes for Allocators

How do you allocate? Are you Big D, strong on defense? The defensive game is heavy on blocking and tackling, a focus on operational excellence and lower volatility managers to ensure that investors’ funds remain secure. You invest in products protected by the impenetrable defense of long-standing, stable franchise teams, organizations that have seasoned management, strong audit and compliance. This allocation style is like the tried and true ranch dressing that finds its way onto just about everyone’s plate.

Or are you Big O, with a focus on offense and aggressively moving the ball down the field? The offensive game serves those with a higher risk appetite, seeking the razzle dazzle of high-flying managers, the explosive play driven by a strong arm and passing game, with the expectations of the rewards and bragging rights of big alpha plays. This allocation style is like the Eastern North Carolina barbecue sauce: serves those with a taste for vinegar.

Or maybe you invest in a large squad of scouts and their analysis to provide breadth, recruiting a deep bench that can cover all the basics. Your research-intensive approach identifies a diversified portfolio of emerging managers, including the receiver who gets creative to move the ball down the field, the unprepossessing kicker with the failsafe leg, and the scrawny linebacker who can punch above his weight. This approach is like Kansas City barbecue sauce with a widespread appeal that is both sweet and tangy.

How do you make sure that your allocation game is competitive within the context of the broader fund universe? There are some 18,000 SEC registered advisers in the US alone, and many more abroad. Investing in the equipment to apply your secret sauce at scale is key. Whatever your recipe, digitizing your information into data for streamlined analysis and decision making on the DiligenceVault platform leaves you better equipped to serve up superior returns.

Secret Sauce Recipes for Advisers

As with the allocators, there are lots of different ways for investment advisers to be successful. What kind of investment products does your team offer? Do you go for the broader retail market, moving the ball methodically down the field with traditional stock/bond mutual funds or ETFs? This is a basic running game that occupies a large section of any investor’s playbook. It’s the classic slider of investments, with meat, bun and condiment to satisfy any palate. However, you’re in a very competitive market. Your PR/IR and marketing teams have a big job to communicate the value of your franchise to the broader public, converting investors and keeping them in the fold of your fan base. Your RFP people particularly need all the leverage from technology that they can get not only to process all RFIs, but to stand out from the competition. DiligenceVault technology allows your RFP team to work smart, not just hard, and to focus on value added so that your firm’s offering lands on the plate of investors.

Or does your team have a particular focus, perhaps on non-investment grade emerging markets or a niche Nordic strategy? Maybe you specialize in private markets, lower liquidity asset classes such as venture investments, litigation finance, private equity buyout or risk premia strategies? These advisers are like the specialty caterer that provides atomic wings, a regional favorite pepperoni roll, or even a full-on pig roast. These specialty plays are found in the playbooks of allocators whose mandates accommodate a greater risk appetite.

Apart from your strategy, how is the rest of your game? How agile is your team overall? Are you nimble enough to respond to investor requests? How do you minimize unforced errors? Can you compete against a strong competitor’s unanticipated strategy shift? Are you up to the challenge of winning a mandate from an allocator with a strong defense?

You can enhance your leadership’s oversight and your team’s internal communication and execution with dashboards and workflow automation that provides transparency and enhances communication and efficiency, like the DiligenceVault platform. If you invest in technology, you streamline your processes and put your offense (strategy and performance) in congruence with your defense (control functions). Leadership (management and the coaching staff) has the tools they need for oversight and analysis, so your whole team comes together to implement a winning strategy. You have the confidence to go long, knowing that your fundamentals are solid. You can always punt when you need to.

So enjoy the SuperbOwl and all that goes with it on Sunday – and then on Monday come back to the field fueled with new energy and inspiration to work smart and win your own Big Game!

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