THE SKILL LIBRARY

A collection of insights for identifying skilled investment managers


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The Active

Management Industry

This multi-trillion dollar industry is predicated on the idea that investment managers have skill or at least many do. Yet, little is known about skill – who has it? How is it measured? This website is dedicated to finding the answers to the questions surrounding skill >>>>

Today's Challenges

Selecting an active equity fund is a difficult task. It’s made even more so by information shortfalls that undermine capital owners/allocators committed to this asset class. Fund assessment and manager reviews can be vastly improved by addressing the industry’s most significant informational shortfalls.

Skill

The presumption of skilled managers underpins the very notion of active management. Yet, direct measures of skill are absent throughout the vast majority of the industry. In its place capital owners/allocators continue to rely on sketchy inferences of skill based on fund outcomes like returns and holdings.

Processes

Repeatable decisions, consistent results, and the ability to improve are available only when a fund has in place calibrated investment processes used to guide choices. However, there is little analytic confirmation of processes today. Instead, capital owners/allocators rely upon high-level schematics and verbal descriptions in attempting to understand a fund’s processes.

Future Alpha

For those investing for the long term the question is: Which equity funds have a better than average likelihood of outperforming, more often than not, over the next five years, ten years, and more. There is no simple answer nor single analytic result that tells all. By integrating some of the newer analytics now available capital owners/allocators can be much better informed and make more effective allocations.

The Skill Library

Our library of resources for identifying skilled investment managers.

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ARTICLES

Mike Ervolini has authored dozens of articles about active management appearing in both academic journals and trade outlets, including: The Journal of Portfolio Management, The Journal of Investing, Institutional Investor, Pensions & Investments, Investments & Pensions (Europe), The Financial Times, and Forbes.

ESSAYS

Behavioral Matters is a series of essays on the application of Behavioral Finance written specifically for professional investors and portfolio managers.

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COMMENTARY

This section is coming soon. Stay tuned.

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MICHAEL A. ERVOLINI

AUTHOR AND ACTIVE MANAGEMENT EXPERT

The ideas expressed on this website are developed and/or curated by Michael Ervolini. Mike has spent his entire 35+ year career leading efforts to improve and strengthen active management.

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The multi-trillion dollar active management industry is predicated on the idea that managers have skill – yet little is known about it – Who has skill? How is it measured? This website is dedicated to finding answers to the questions surrounding skill.


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