GLOBAL – Ratings agency Moody’s Investors Service has upgraded its asset management ratings services to include more of a quantitative element.
The new move is an enhancement to its existing Investment Management Quality ratings, it said.
“Along with traditional qualitative reviews, the agency's MQ ratings will now include a series of objective, quantitative benchmarking tools that provide even more rigorous insight into the abilities of money managers,” Moody’s stated.
The ratings are applicable to companies that manage retail, high net worth, and/or institutional assets. They will be issued “by request”.
The rating will cover investment management activity, investment results, financial profile, and client servicing.
Each category will then be sub-divided and assessed using both qualitative and quantitative measurements.
"The Investment Manager Quality ratings present an independent, third-party assessment of an investment manager's overall quality and expertise,” said analyst Henry Shilling.
“For issuers, the MQ rating provides a clear and objective means by which to communicate its characteristics relative to those of its competitors.
“For investors, the ratings provide a much-needed tool for comparing managers.”
Shilling recently wrote a report explaining Moody's methodology for determining the ratings.
The ratings differ from Moody's traditional fund ratings in that they isolate the capabilities of the fund manager from the risk of the assets in which the fund invests, the firm says.
Shilling said the ratings assess the manner in which an investment manager “creates, manages, and monitors its investment offerings and serves its clientele”.