Deconstructing returns to understand how managers deliver alpha
SEDCO’s Sharia-compliant manager search included investment guidelines with respect to certain sectors, so it was important for the firm to validate that managers were generating alpha in those specific sectors. “We were looking for a manager that was quite active and very far from the benchmark,” said Rakotonanahary.
“High concentration and low turnover were also important, because we’re looking for long-term alpha generation. With eVestment Holdings Analysis, we were able to assess managers on these considerations, ultimately leading us to five finalists.” Critical to this time-sensitive search, the SEDCO team was also able to conduct this analysis quickly, all within the same eVestment platform.
“For us, eVestment Holdings Analysis has really been a breakthrough. We’re going beyond looking at the track record and doing regression to get a full picture of how a manager generates alpha through style-, country- and sector-allocations – and how those have changed over time.”