(March 5, 2014) — Global consulting firm Towers Watson has appointed a new head to its investment practice in Europe, Middle East, and Africa, and brought in an external firm to strengthen its equity research.
Ed Francis is to lead the investment team in the region after former leader Chris Ford was promoted to global head in February.
Francis joined the company in 2001 from PwC and has been part of the local investment leadership team and head of the UK client consulting teams at Towers Watson.
Additionally, research firm Inalytics’ quantitative measures of skill are to be incorporated as part of Towers Watson’s due diligence process for researching equity managers, the companies announced.
Rick Di Mascio, CEO of Inalytics, said his firm had established a method to establish the link between an investment process and performance, by analysing the results of every decision a manager takes, to develop an accurate picture of their investment skill.
“By demonstrating managers’ skills in three key areas: finding winners; knowing when to sell; and holding winners, Inalytics helps facilitate an effective dialogue over the level of skill behind an investment process,” said Di Mascio.
Hiring managers classed as having “skill” could earn returns up to five percentage points more a year than if an investor opted for a lower calibre candidate, Inalytics found last year.
The firm found these managers beat a benchmark, set by the lowest performing in their group, by about 480 basis points per year. This “skill” was split into three sections: get more than half their decisions right; are able to run their winners; and be able to cut their losers.
Related content: Hess Up, Ford In as Towers Shifts Investment Chiefs & Video: Inalytics CEO Rick Di Mascio on Identifying Managers’ Skill