Services for Asset Managers

Research

Steve Clapham is a highly experienced investment analyst with an outstanding reputation for in-depth analysis. Through an FSA registered affiliate, we offer a research support service to institutional investors. You may have your own stock idea that you needs investigation; you could have a problem with a holding that warrants an accounting health check; or you may simply wish to access Steve Clapham's experience and stock selection skills (to bridge a vacancy or on a more permanent basis). Please contact us for a confidential discussion.    

Other Services

We provide three further services to asset managers:

Training and development of experienced equity analysts
Portfolio construction analytics
Research model development 

When we get involved with a client’s portfolio, we put in place Chinese walls to ensure that the information is safeguarded. All portfolio data is encrypted or stored with password protection. We have an internal PA dealing policy which meets the rigorous standards of an FSA regulated firm.

Equity Analyst Development and Evaluation

Our training module is designed for asset managers and is for experienced equity analysts only. It’s a tool to help an analyst improve his fundamental analytical skills or to help management assess them. It can be used to evaluate an existing or potential member of your team or as a development tool to help your team improve their abilities.  As a development tool, your analysts can assess their own performance; as an evaluation tool, you can assess their performance for we can do it for you.

The module is a fun experience, and it’s simple to use. It takes the form of a case study of a semi-fictitious company. The module sits on our website with a shortened 10-K style filing and a few straightforward questions. It takes a couple of hours for a competent and experienced analyst, following which self-assessment can be completed in half an hour. Assessment by us or an internal supervisor should take 30 minutes to one hour.

Most asset managers spend a fortune on research, both internally and externally. Yet it’s quite difficult to develop your staff, except at more junior levels. Portfolio managers receive on-the-job training all day and every day, and so do analysts, of course; but while a fund manager generally learns lessons painfully, analysts need not learn ALL their lessons that way. It's possible to develop skills in a Research department, and lessons learned can save the fund money. Our module is not easy, and your analysts will certainly learn something.

If you are one of the majority of asset managers which spend huge sums on the research team, yet have a training budget of virtually zero, please consider giving us a trial. Research skills can be learned, honed, and advanced at a relatively limited cost. To find out more, contact info@behindthebalancesheet.com.


Portfolio Construction Analytics

We have extensive experience of analysing portfolio for inadvertent risk skew, whether this is to geographical factors (exposure to China may be indirect if your customers are commodity producers, but just as significant as direct exports), to economic factors (direct exposure to interest rates through floating rate debt, indirect through sensitivity to consumer disposable income), or structural factors (through having too high an exposure to companies with high fixed costs and therefore high operational gearing).

Our analytical team have access to a suite of exposure assessment modules, and we can either perform the assessment ourselves, or, better, help your research team develop the appropriate tools.  To find out more, contact info@behindthebalancesheet.com.

 

Research Models

We can assess your standard research model and suggest improvements in order to increase analyst productivity, guard against portfolio quality dilution, or improve the quality of your research assessment. Contact us at info@behindthebalancesheet.com for more details.

 

Case Study

We developed an analytical tool for one of the big 4 audit firms which has been adapted for equity investors. The firm's UK Senior Partner was concerned that the firm was seeing an increased level of litigation risk and was looking at how they could best protect themselves by identifying potential issues and at the same time improve their productivity.

Our solution was a tool which all their audit teams could use at the commencement of the year end audit. The tool takes the draft accounts and identifies anomalies, potential issues, and key areas of risk. Using a graphical interface, anomalies are clearly flagged. The tool has afforded the audit teams a major productivity boost as it allows senior members of the team to focus on areas where there is a real risk of mis-statement.

We have a similar tool for investors in quoted companies – the tool identifies a company’s financial quality. The example in the earnings quality chart above is Vodafone, with the latest data and the explanatory axis titles removed. This illustrates how the tool's graphical interface clearly flags anomalies; it is constructed in various modules including balance sheet analysis, indebtedness or leverage, operational gearing, and even one entitled cooking the books!

Section of the Cooking the Books Module

This is a snapshot of part of one module of our analysis tool, with the titles obscured and the latest data not shown. The example again is Vodafone.