Michael Lock · Institutional Analysis Simplified

Posted on 2019-05-31

How does an institutional investor go about selecting an investment in liquid capital markets?

Hint: Historical returns are not the only factor. In fact, they are just a conversation starter, not the main entree.

In our experience, most institutional investors will perform extensive analysis on a potential investment before making any decision on whether or not to allocate capital. Research is done to understand the thesis of the investment program (i.e. what it trades, how it generates profits, how it protects against losses, who is running the program, tax effects, etc). The rate of return on the investment program is really just the teaser statistic to open the door for a more thorough analysis.


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