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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