UK university fund in behavioural finance move
UK - The £22bn (€32.4bn) Universities Superannuation Scheme is to assess fund managers using a behavioural finance tool, according to supplier firm Inalytics.
Inalytics said it is to supply its Behavioural Performance Strategies tool, which assesses how fund managers' personality traits affect their performance, to the final salary pension scheme for university staff. Financial terms were not disclosed. The scheme says the product is "groundbreaking".
Inalytics - founded by Rick Di Mascio in 1998 - said BPS works by examining the biases that influence timing decisions and portfolio construction - shedding light on managers’ skills and weaknesses.
"Once understood, these behavioural biases can either be contained or exploited, leading to improved performance," it said. It added the scheme would use BPS both to gain a better understanding of its external managers' investment processes and to determine their "real level of investment skill".
"Rick and the team at Inalytics have produced something genuinely groundbreaking in BPS," said USS chief investment officer Peter Moon.
"Behavioural finance has been much talked about over the years but until now there has never been a tool capable of delivering any meaningful results.
"BPS changes that and opens an important window on the investment process that will have implications across the fund management industry."
Inalytics launched BPS earlier this year. It is designed to examine how fund managers' investment decisions and fund performance are affected by their personality traits.