Nobody in the investment world operates in a vacuum. The markets are a shared arena, and every manager's choices echo somewhere, creating patterns and trends. Thanks to modern analytics, managers can now take advantage of these patterns more easily than ever. Peer analysis turns those echoes into a roadmap to innovation and outperformance.
Peer analysis shouldn’t be just about comparing notes with the competition. The science lies in running the numbers, but the real value comes from interpreting the data, spotting what others have missed, and using those insights to spark new ideas.
Let’s explore how asset managers can use peer analysis to identify gaps, and generate new investment ideas.
Peer analysis gives you a window into the strategic decisions of other managers—where they’re overallocated, where they’re underexposed, and whether they’re outperforming because of a tilt toward specific factors. With advanced portfolio tools, these comparisons don’t just reveal performance gaps, they also show you why those gaps exist.
Using additional metrics like Brinson sector attribution, you can see which sectors have driven the success of top-performing portfolios. Managers can figure out what’s winning, as well as what’s driving the win.
Take tracking error as another example. A lot of managers see it as just a risk measure, but dig deep enough, and you could come across undiscovered opportunities. High tracking error could indicate a peer is playing an angle—a unique allocation or unconventional bet worth exploring.
Peer analysis will tell you what others are doing, but it also informs you what you could be doing better.
- Spot Trends: Let’s say you’re benchmarking against a set of long-only equity managers. Peer analysis reveals an increasing tilt toward green energy. Not only does this signal a trend, but it might point to a blind spot in your own portfolio.
- Find Overlooked Opportunities: Your analysis reveals that peers in your category are outperforming due to exposure to mid-caps—a space you’ve been neglecting. An immediate area to explore.
- Challenge Your Assumptions: Maybe you’ve stuck to the safety of familiar factor exposures. But peer analysis shows size and momentum factors driving outperformance. Now, you’ve got data to justify stepping out of your comfort zone.
Thanks to modern analytics platforms, the era of painstaking manual peer analysis is over. Today, managers can perform peer analysis in a quick and efficient manner by leveraging one of many available solutions that can run the analysis in no time.
Want to know why your returns are lagging behind peers? Or which sector is pulling the most weight for top performers? It’s all there, visualized and ready for action. Real-time metrics give you the edge to act fast. On top of that, widely available collaborative features mean your entire team stays aligned as you move from insight to execution.
For top-performing managers, peer analysis is a habit, not a one-off exercise. They use it to:
- Pressure-test their ideas.
- Validate assumptions.
- Spot new angles before the market catches on.
Peer analysis gives the context to know when to zig when everyone else zags. With the right tools, this process becomes second nature.
At Kiski, we’re building solutions to make that possible. Peer analysis is just one piece of the puzzle—but for managers hungry for ideas, it’s one of the most valuable tools in the kit.
So, what’s your next move? Let’s find it together.
