Credit managers to come under big data microscope

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Data provider Inalytics, which advises institutions managing a combined $ 124 billion on the behaviour of their equity managers, has started to analyse the way corporate bond investors implement their strategies.

Currently, the firm draws on 145 million data points to work out how equity managers implement their decisions. It uses this to provide reports on behaviour to asset owners and management firms, plus confidential coaching to star managers paid for by employers.

Inalytics has carried out a “very preliminary” analysis of credit managers, with a view to developing a full service, according to its founder and chief executive Rick Di Mascio.

“We have often found that 85% of managers sell equities too early, leaving money on the table for their buyers,” he said. “Credit managers tend to leave less, suggesting they are keen to invest for the long term and avoid risks from credit downgrades. But the result is more mixed than we expected.”

Six of the firm’s clients have already signed up to the new credit service, according to Di Mascio, and Inalytics plans more research to understand the situation better.

Inalytics was founded in 1998 by Di Mascio, the former managing director and CIO of CINMan, the in-house fund manager for the British Coal pension schemes. After CINMan was acquired by Goldman Sachs in 1996, becoming an important European beachhead for Goldman Sachs Asset Management, Di Mascio was made head of its UK unit.

Initially a service offering assessment of transition managers – which are usually custodian banks and help pension funds to implement large-scale investment reorganisations – Inalytics moved into crunching big data to assess active equity managers’ performance in 2004.

The company also retains the services of three sports trainers to assist individual managers, including former British cycling technical director Shane Sutton.

Di Mascio said: “Winners are enormously motivated to raise their game further.” He said portfolio construction can give clues to stress or anxiety, often caused by poor short term returns, which benefit from better coping mechanisms.

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