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Fitch to rate managers’ investment process

GLOBAL – Fitch Ratings has launched ratings of asset managers’ investment processes.

“Fitch Ratings has today launched its Investment Process ratings, developed to provide an independent assessment of the investment processes within an investment management organisation and to provide an indication of its capacity to deliver stated investment objectives,” the agency said.

The five-level ratings would complement Fitch’s existing asset manager ratings.

“The development of our Investment Process rating methodology reflects our continuing effort to enhance the usefulness of our analytical outputs and is consistent with the recent consolidation of our fund and asset manager rating resources,” said Fitch group managing director Charles Prescott

Fitch said it has “new methodology” designed to assess the quality of an investment process in terms of resources, decision-making process, investment risk management and portfolio management and monitoring tools.

The factors to be reviewed include: staff and organisation; portfolio management; investment risk management and technology and operational environment.

It says it has a “systematic framework” for assessing the quality of investment processes, staff experience, decision-making, portfolio management tools, control and investment risk monitoring.

Each factor is assigned a relative weight although it will be “qualitative input” from Fitch that will affect the final ratings.

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