After a year at the helm of Performance Watcher, Pierre-Alexandre Rousselot discusses the community that has grown up around the platform, the obstacle he hadn’t anticipated, and the impact of a shared standard.
You’ve been at the helm of Performance Watcher for a year now. How has the journey been?
Warmer than expected – and that’s not a word you’d normally associate with performance measurement.
I thought I was joining a software company. What I found was a community. Our users write to us, agree to share their stories, display our name on their websites, and tell us what they’d like to see developed. I often say: I don’t manage users, I manage fans.
That changes the nature of the job. Most of my week is spent focusing on how managers want to explain their work, not on features. After a year, that’s the part I enjoy most.
This side of the industry is very different from the one you come from. What challenge did you not anticipate?
A paradox that I hadn’t seen coming.
Within the community, the platform is used extensively, and our users champion it better than we do. Outside the community, Performance Watcher remains relatively unknown. So the divide isn’t between those who like it and those who don’t, but between those who’ve seen it and those who’ve never heard of it.
This is the challenge facing any small brand that wants to make a difference in an established sector, and I’m taking it in my stride. Our job is to get the industry to spare a minute for it. Those who do so generally discover an aspect of their own environment that they didn’t realise could be measured.
You say that your clients are your fans. Can you give an example of how Performance Watcher has changed their operations?
Prime Partners, in Geneva, is a good example.
They have constructed a benchmark for their strategic asset allocation (SAA) and compare each portfolio and each management cluster against this benchmark, rather than against the external market.
This allows them to see, on a single screen, which portfolios are following the in-house strategy and which are deviating from it, well before this becomes a performance issue. They can then compare their SAA with their peers and assess their level of competitiveness.
This two-tiered structure is extremely powerful for ensuring consistent client management, risk control and understanding their level of competitiveness. This insight enables them to manage their business as effectively as possible.
Your clients also talk about you externally when they publish their results. What do they gain from this?
It shortens the slowest part of the client acquisition process.
Christian Luchsinger, of Sound Capital, puts it precisely: “When I have clients who were previously with a bank, or who are less familiar with the business model of a wealth manager, and who nevertheless want to know where we stand in terms of performance and how we work, Performance Watcher provides me with an independent benchmark that I can use to show a client, in a fully transparent manner, how Sound Capital is performing. In my view, this is a crucial step in winning clients and giving them a sense of confidence in how an asset manager operates.”
Sébastien Berthoud, of MFM Mirante Fund Management, is more direct: “As we aren’t necessarily a very well-known player, it helps to reassure potential clients by clearly showing how we compare with the major banks and other institutions.”
Neither of them suggests that this replaces the personal relationship. Both describe the same outcome: the initial stage of building trust is achieved more quickly.
What sets the platform apart from what the market currently offers?
In our line of work, measurement often stops at two dimensions. Performance: what you’ve produced. Volatility: what you’ve risked to produce it. Two honest figures, yet both say nothing about the one question a client asks: is it any good?
The usual answer is an index. But an index doesn’t pay fees, doesn’t hold cash and doesn’t adhere to any client constraints. It compares your work to something that nobody manages.
We have built the third dimension, and it cannot be calculated. It must be gathered. More than 22,000 real portfolios, anonymised before reaching us, representing over 85 billion francs in assets under discretionary management, all measured in the same way. Each portfolio counts once, whether it is linked to a major bank or a ‘boutique’ asset manager.
We do not manage money or sell funds. We therefore have nothing to gain from the results we publish. A standard does not belong to a single company. It is something on which a sector agrees, and which it builds together.