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Simon Blanchard
MBA, CFA

Principal Director, Manager of Managers

Qualifications, like at the Olympics!

Key players in our quest for excellence, our portfolio managers play a crucial role in the performance of our funds and in our Private Management approaches. Like aspiring Olympic athletes, they must be selected according to a rigorous process, which requires the diligent verification of a huge amount of information.

This process is very important since any oversight or negligence could prove costly not only for the short-term performance of our funds, but also for the cost of transactions and the tax impact.

Our criteria of excellence

At the Financial’s several steps must be successfully completed before being admitted to our team of portfolio managers.

Prerequisites

Mandate

As with an elite sport, we need to determine the specific objectives of the mandate we want to assign, particularly in relation to the benchmark index.

Objectives and parameters / Our requirements:
  • Risk/return: We look for a management style that seeks lower volatility than that of the benchmark.
  • Achieving attractive returns: We want a management style capable of producing above-average returns for comparable funds.

Qualifying events

Quantitative analysis

In this quest for excellence, some thirty variables are assessed:

  • Each manager’s performance is analyzed based on performance, volatility, up and down market capture ratios, and various risk metrics.
  • We look at compound returns on a periodic basis (annual or monthly), in the context of the economic cycle and the management style.
Qualitative analysis

We closely analyze: the investment philosophy and management style, how the portfolios are constructed, where value is added, what information systems are used to manage the funds, how ESG factors are integrated, as well compliance of all operations, in addition to verifying the team’s internal governance. Essential criterion: the reproducibility of the management process over time.

For multi-managed funds (several managers): Since it is a team effort, the manager’s contribution to risk diversification and the complementarity of the manager’s style and portfolio construction are key.

The finals

Finalists

Following these qualifying events, three to seven finalists are selected and are asked to complete a detailed questionnaire. Meetings are held between the finalists and the internal investment team.

Choice of the winner

All the preliminary selections are finalized with the input of three members of the investment committee, which is an external committee made up of investment experts in Québec. The members participating in the selection process support the internal team of managers. A manager is chosen.

Staying on the podium

Performance monitoring

Reaching the podium is only one step in the process—you still have to stay there! The mandate of an external manager is assessed on an ongoing basis and may be extended over long periods if their management is deemed satisfactory.

  • Daily monitoring – This is done with data provided by our internal systems. Each fund is compared to its benchmark and, in the case of Series A funds, to the Morningstar database.
  • Quarterly meetings – They enable us to review the performance and positioning of the portfolios.
  • Annual visit – We visit the managers at their workplace and meet the key team members.
  • Annual statutory meetings (6) – The performance of each of the funds and portfolios is presented to the members of the investment committee.
  • Annual review – An in-depth review of each of the Private Management funds and model portfolios is done once a year. The external managers are evaluated according to their contribution to performance, their risk management, team stability, etc. A colour code is assigned to them.
End of the mandate

Whether it is due to a lack of dynamism or an inability to excel on a regular basis, we can terminate a mandate for various reasons (performance, risk management, change of shareholders or of key personnel, loss of confidence in the ability to manage assets well, relevance of the mandate, legal and reputational risk).

Before the total withdrawal of a mandate, partial amounts can be withdrawn to limit the impact in the event of persistent underperformance.

Creating value

Just as winning a gold medal at the Olympic Games requires an unshakable will and years of intense and regular training, sound management of your assets is built on basic principles which we apply systematically by selecting external managers who share them and put them into practice.

Our objectives are focused on creating long-term value, to enable our clients to achieve their life and career goals. It’s not a magic formula, but a disciplined approach which requires constant attention and whose benefits will be reflected in your portfolio.

And when we are called to the podium because our funds have stood out from their competitors, this only makes us more proud and more determined to continue on the path of excellence!

Simon Blanchard, MBA, CFA
Senior Director, Manager of Managers

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