Hedge fund analytics for institutional investors

When evaluating current and prospective hedge fund managers, many institutional investors rely on 12 data points a year, and maybe a couple of go-to stats to assess a manager’s historical performance. However, cookie-cutter analytics is an insufficient strategy for thorough analysis given the range of investment strategies and asset classes currently in the hedge fund space. 

The SEI Novus technology offers deep analytics for understanding manager skillsets and identifying pockets of over- or under-performance within a manager’s book. Hedge funds themselves use SEI Novus to identify and maximize their alpha potential. The same toolkit is used globally by asset owners (such as foundations, endowments, sovereign wealth funds, family offices, and pension funds) to provide a deep understanding of the manager funds where allocations are held.

SEI Novus hedge fund analytics and metrics are designed to help investors distinguish the signal from the noise, elevating the investor-manager dialogue.

1. Manager skillset
   Batting averages and win-loss ratios are a great start, but our technology helps you go deeper to answer questions like: Is the manager’s performance rooted in actual stock-picking ability? Are the manager’s trading behaviors adding or detracting value? How do they manage downturns and volatility? Has the fund’s style drifted over time, and what is the effect?
2. Attribution framework
   Analyze attribution through SEI Novus’ proprietary manager framework, or across traditional industry methodologies like Brinson and Alpha/Beta decomposition of returns, with thousands of benchmarks at your fingertips. 
3. Event analysis
   Check a manager’s skill with timing—assess whether a manager is entering or exiting a position too late or early, as well as test for other behavioral investment biases.
4. Overlap and correlation
   Obtain a complete picture of your exposure and resulting diversification by considering the similarity in holdings across multiple managers. View overlap or correlation of the portfolio and position level based on preset or custom groups. 
5. What-if analysis
   Evaluate the impact of potential investment decisions surrounding exposure, category, security selection, position sizing, and trading. Compare actual manager returns to hypothetical returns to optimize your portfolio.