JPMorgan offers manager analysis to institutions

The bank looks more like a consultant as it extends existing performance-measurement capabilities to third-party fund manager rankings.
JPMorgan is entering service areas traditionally provided by investment consultants, by providing technology platforms that seek to replicate what consultants do on behalf of institutional investors.

The bank believes institutional investors and portfolio managers can generate additional risk-adjusted returns through the use of systematic ways to rank managers and analyse risks. Its securities services unit is rolling out a suite of products that provide manager-consistency analysis and marginal-risk analysis, aimed at institutional money managers, pension funds and endowments.

The bankÆs manager-consistency analysis tool scores external managers across asset classes, based on risk-adjusted returns. It is meant to identify for institutions which third-party managers consistently generate alpha.

The marginal-risk analyser helps investors incrementally improve the risk/return profile of a portfolio, by letting them play with different mixes of asset allocations and manager selection, and seeing how that impacts total risk in the portfolio.

The new investment improvement tools were developed by the JPMorganÆs investment analytics and consulting (IAC) division, which helps institutional clients optimise portfolios by creating customised and forward-looking solutions that address both current and future requirements. Its existing toolkit includes asset-liability analysis, performance measurement and value-at-risk calculations. This division of JPMorgan provides services to more than 200 clients internationally with $1.5 trillion in assets.
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