Traditional

Federal Street’s research process is designed to identify superior active investment managers in each of several pre-defined classes of financial assets. We concentrate on the asset classes that we believe will provide most effective diversification benefits to our clients.

The process begins with quantitative screening to narrow the list of potential candidates, and continues with an in-depth qualitative evaluation prior to selection. Once selected, recommended managers are subject to continuous evaluation and due diligence. All investment professionals at Federal Street participate actively in monitoring recommended managers.

Alternative

Federal Street’s process for identifying Hedge*Fund and Private*Equity managers begins with leveraging our extensive industry network. We look for experienced managers who are trying to exploit inefficiencies in the market. Ongoing due diligence requires constant monitoring and interaction. We speak with our managers on a regular basis to better understand portfolio structure and where the risks and opportunities may be.

Rather than recommending single funds in isolation, we look to build a portfolio of alternatives consistent with our client’s long-term risk/return objectives. These portfolios are custom tailored to integrate with the rest of their investment program.

ESG-Focused Managers

Federal Street engages in the same level of rigorous due diligence for managers focused on Environmental, Social, and Governance (ESG) factors as it does for traditional investment managers.  Additionally, we evaluate the manager's ESG investing process and capabilities, including the source, depth, and independence of their ESG data, and the value they are able to add beyond standard stock screening, for example through shareholder advocacy or direct community involvement.

While our general recommendations reflect industry-standard ESG criteria, Federal Street monitors issue-specific products as well and can work with foundations whose missions focus in areas such as community investing, education, health, climate change, animal rights, or that may have specific religious restrictions.  Additionally, Federal Street evaluates alternative investment opportunities such as social venture capital where appropriate and when available.