Lessons from Evaluating Investment Managers with Clare Flynn Levy

In this episode, we speak with Essentia Analytics founder Clare Flynn Levy. Essentia has developed software to evaluate investment managers and help them improve as investors. We discuss what Clare has learned through that process and the lessons all of us can take from it.

02:02 – Clare’s background and what led her to found Essentia
08:25 – The type of data Essentia looks at when evaluating managers
11:43 – The biggest mistakes investment managers make
13:58 – Focusing on strengths vs. weaknesses
14:52 – Quantifying the impact of mistakes
16:13 – The impact of soft data and external factors on manager performance
20:09 – The behavioral alpha benchmark
24:19 – Win rates and the impact of big winning positions
26:14 – Do investment managers add value with their decisions?
29:09 – How to properly deliver feedback
33:54 – How the feedback process works
36:34 – Discretionary vs. quantitative managers
42:33 – The role of artificial intelligence in manager evaluation
45:43 – Assets vs. alpha
51:16 – The biggest lesson investors can learn from the evaluation of professional managers
53:50 – The one lesson Clare would teach the average investor

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Originally Posted August 17, 2023 – Lessons from Evaluating Investment Managers with Clare Flynn Levy

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