Oct 11, 2022

Imagine you start your day with the announcement that your firm has been acquired or is merging with another company. After getting over the initial shock, you realize that the executive team eventually will turn their attention to restructuring and integrating the performance teams at each firm. As they weigh their options, the executive team will consider future needs and work to craft a team structure that best positions the new firm for success. They will evaluate the performance teams’ scope of responsibilities (portfolio level returns, attribution, style, analytics, RFP management, etc.), technology, and team composition, including overlap of specialist skill sets and locations.

As firms consider M&As, they need to perform detailed analysis on each operational unit with an eye toward efficiency (i.e., cost savings), improved client experiences, and economies of scale.

Performance Team Scope

Your performance team’s volume and complexity influence how a firm will integrate a new set of investment products or an acquired investment team. Firms should consider various organizational structures including a Center of Excellence (COE), which offers several benefits that change your team’s structure and day-to-day responsibilities.

Performance Team COE Benefits:

  • Centralized leadership with clear governance
  • Greater flexibility in a fast-paced investment evolution environment
  • Streamlined processes and shared systems that create efficiency and scale
  • Single source of truth for internal and external consumers
  • Career progression, skill development, and retention
  • Consistent adoption of policies and procedures

Firms can establish a COE by product type, strategy, client segment, region, etc. A COE creates a logical home for performance, enabling a more efficient and consistent approach to performance calculations and presentation. This plug-and-play approach creates an attractive ready-to-integrate model that can often move more quickly in establishing the connections and oversight necessary for performance management, analysis, and reporting.

Performance Team Composition

Your performance team members matter … a lot. Ensuring you have the right mix of knowledge to effectively manage the process will pay dividends when acquiring and integrating new members and processes. The makeup of your COE and the roles that each performance team member plays are key to creating a cohesive process and foundation for teamwork as you both work toward a common goal.

Staff Integration Best Practices:

Unlock the experience and knowledge of the team

  • Your performance team’s understanding of performance calculations, where they’re used, as well as relationships with sales, distribution, and portfolio management

Recognize the potential of both teams

  • Encourage new members who are absorbed into the acquiring firm and existing analysts to share their insights and experiences on processes and solutions that have proven successful in the past

Leverage individual and team strengths

  • Integrate a new member from a different organization into your performance team with specialist skills (private markets, derivatives, real assets, etc.)
  • Establish lines of expertise, policies, procedures, and streamlined processes that provide numerous benefits for your team as well as the members joining your team
  • Expand your understanding of new assets and techniques, while applying the same rigorous control structure that’s in place for all existing calculations and product types

Adopt and mandate the CIPM designation

  • This CFA Institute “seal of approval” indicates that you and your team recognize the career path of the performance analysts and have positioned yourselves for future growth with an emphasis on capability and training


For a single country-based firm, firms may not find it worthwhile to spend time on location considerations, but as the investment management industry (and firms) expand into other markets, your team’s geographic location becomes critical. Client and sales requests, local regulations, and systems compatibility can necessitate having a local team. Though this is often solved by having “boots on the ground” in the country or hemisphere where clients reside, virtual teams can now be accessed from anywhere in the world.

The challenge with any acquisition that involves investment products marketed to different parts of the globe is the unique characteristics of the individual markets. Though GIPS solves many of the “approaches” to performance calculations, many non-US clients expect different levels of detail when receiving their performance information. An example may be a Japanese client who requires that they see their performance to the eighth decimal, while also requiring that any differences in account value greater than a fraction of a penny be investigated. Understanding these requirements and integrating these regional differences into your team, rather than pushing back and insisting on a “single” approach for all clients, will be critical to positioning your team’s global capabilities. As technology has advanced, even global teams can effectively leverage a COE approach, providing the same level of capabilities, central decision-making, and region-specific compliance.


Many firms may assume that a team with newer or more integrated technology is automatically the beneficiary of increased responsibility, but in some cases reasons may exist to continue to keep those systems in their original installed state rather than decommissioning or expanding their usage to the acquiring firm. A key element during a performance operating strategy evaluation is the use of purpose-built technologies (people, processes, technology, and data as the four cornerstones of your operations).

Examples of System Evaluation Criteria

  • System age and the version your team is running
  • Costs of system, including licensing, maintenance, and needed enhancements
  • System viability for current and future use cases
  • Functional comparison between systems, including ease of integration with other tools
  • Specialist tools (private markets)
  • System utilization

The Intangibles

Although our industry prides itself on efficiency and optimizing resources, there can be less tangible reasons why firms make decisions regarding performance. Among them may be the decision to not integrate, keeping teams focused on their respective client base as an assurance to clients that the acquisition/merger will not result in any service disruption. Other difficult-to-measure areas may relate to the management of the assets or relationships with the front office, marketing and sales, and senior management. The key to achieving the best quantifiable position is ensuring that your team is uniquely positioned to aid, integrate, and grow your firm’s performance capabilities into the future.

Interested in learning more about COEs?
Check out our COE infographic.