At BHK, manager research and selection is a dynamic process. We strongly believe that asset management is an art as well as a learned discipline and that our years of experience allow us to guide our clients to managers well suited to the client's specific objectives. We find investment management talent from our colleagues in the consulting business, from other managers, from clients and from data bases and industry sources. We distinguish ourselves by seeking out the lesser known emerging, yet experienced, managers who are not yet a household name and thus may be excluded from manager searches by other consultants. Our selection pool includes but is not limited to only well known firms with large asset bases.

In order to identify investment managers to implement the recommended investment strategy, BHK employs both a quantitative and qualitative due diligence and selection process. Quantitative screens are unbiased comparisons  that use multiple benchmarks to include absolute returns, consistency of returns during up and down markets, risk assumed in achieving stated benchmark goals, and historical correlations to appropriate benchmarks.  Attribution and returns based style analysis may also be performed to verify style consistency and determine how returns were generated. To assess qualitative factors we evaluate due diligence meetings with managers as conducted by BHK principals as well as affiliated analysts. Qualitative criteria includes ownership structure, quality and tenure of personnel, consistency of investment process, commitment to the investment process, quality of internal and external research, compliance, and risk controls. We are very interested in investment managers who employ a well defined defense mechanism and prove the validity of the approach in declining markets.

We seek low manager turnover but recognize that events occur with management firms may that require change. Some of the events that may trigger a manager change include key staff changes, change in ownership, poor longer-term performance relative to benchmarks and peers, and rapid asset accumulation or loss.