How to Build an Investment Research Process That Delivers

Fund managers increasingly need to put their fingers on exactly what constitutes their most successful investment research process. The race is on to understand what makes it work and what doesn’t so that you can establish a consistent, rigorous and repeatable approach to investment decisions that deliver maximum performance with lean efficiency.

And yet in reaching for this template, it’s common to find that best practice has rarely, if ever, been documented. Few frameworks have been consistently implemented either internally, or across the industry. To tackle this, we’ve drawn on client best-practice and recent conversations with PMs to compile the attributes of the most effective investment research processes in our new guide, entitled ‘The Complete Guide to Building a Research Management Process that Delivers’.

In our work with start-up funds right through to multi-strategy, multi-national firms, we’ve found the desire to organize and optimize the investment research process actually breaks down into three key areas. We call these the three phases of effective research management, and they are:

  • Phase 1: Organize your research assets. Here, you’re focused on your research data; the process by which information is compiled and stored.
  • Phase 2: Coordinate consistent research practices. Here, you’re focused on people; the process by which knowledge is shared and used across the fund.
  • Phase 3: Standardize and integrate the end-to-end research process. Here, you’re focused on process; the way in which ideas and decisions are progressed, prioritized, measured, with portfolio positions and external data synced to your research.

Of course the pinnacle of a successful research management strategy is one in which your data, people and processes are working together. When that happens, you can track the entire investment lifecycle from inception to execution, through profit and loss, bridge to active portfolio positions and drive insight to guide future decisions and determine new ways to differentiate the fund.

Sound ambitious? Perhaps. Unrealistic? Not at all. Is it right for your fund, right now? Not necessarily.

This new guide details proven building blocks, critical success factors and methodology across each phase to help you find the route to more consistent, and repeatable investment decisions at your fund – from better organizing research assets, improving analyst productivity, collaboration, and institutionalizing knowledge, right through to integrating end-to-end research workflows, external data and systems.

We know that every fund is different in terms of its technical resources and will to implement structure and process. The degree to which you choose to progress through the different phases at your fund, and at what pace and how you do so, will depend on a number of factors, including your strategy, size, style and starting point. However, regardless of your end-goal for seeking efficiencies in your processes, this methodology can help you on your way to operational excellence.

We’ll be publishing snippets, articles and best practice from the guide here on the blog over the coming weeks, so do keep an eye out, but in the meantime you can download the guide in full here.