Benchmark Financial Services has started a discretionary manager-of-managers program, embedding an “enhanced integrity” process in its selection of money managers.
The firm — which specializes in investment manager investigative and fiduciary consulting — is offering discretionary manager-of-manager programs for hedge funds of funds, emerging managers and traditional managers, said Edward Siedle, Benchmark president. It has no assets under management as of yet but plans to market it to pension plans, among other investors.
Mr. Siedle said he developed the program in response to concerns from clients about investment management stewardship.
“I'm using heightened enhanced integrity due diligence and traditional performance analytics” to select and monitor managers to reduce risk and increase returns, Mr. Siedle said.
“There is a place for enhanced integrity (oversight) in the money management world,” he said. “Integrity issues go from arrangements with brokers and conflicts (of interest) to self-dealing and how you conduct your business generally,” Mr. Siedle said.
In terms of his expertise in traditional money management selection analytics, Mr. Siedle said, “All the investigative work I've done involves examining performance analytics. I go way beyond performance analytics … verifying numbers” and rigorous scrutiny.
“Given that one does not add significant value in looking only at performance analytics, the second half of the value proposition has to be more than performance. I would argue integrity impacts performance.” He cited a 2007 study by the Government Accountability Office, which suggested a relationship between undisclosed conflicts and underperformance.
The firm's registration as an investment adviser with the SEC was approved in January, he added.
He expects to add staff as the firm gains assets, although he has no plans now.