Statistics never lie, but fund allocators say numbers are not enough to tell if a manager is up to the job.
"If a manager underperforms, he can give you an answer about why he did. But you need to know if that accords with what he has said to you before.
"A quantitative analyst may say they can tell the difference between manager skill and luck, but I trust in my ability to judge people when I meet them.
For Manuela Thies (pictured), director and head of Allianz Global Investors' Multi Asset MultiManagement in Frankfurt, it is important to conduct quant analysis covering more than just three years.
"We have quantitative performance analysis, but not just over three years. We look at three months, six months, 12 months and five years. We also use rolling periods to try to see how funds react in different environments and whether their management is consistent."
Thies says it is useful to look back to the difficult months of 2008, for example, to gain "a good perspective on how portfolios react to stressed environments".
She adds, though, her team does not rely too heavily on regression analysis, because "as we saw in 2008 and other stressed periods before that, correlations increase when you need low correlations the most. You must always keep in mind past correlations are not always helpful".
One Swiss private banker adds quantitative analysis will "completely miss governance issues" such as suspending redemptions - a plague that angered investors in about 35% of all hedge funds at the height of the 2008-09 crisis".
Jens Kummer, head of the multi-asset team at SEB AM, says only qualitative analysis identifies those start-up managers who might have very slick presentations and communication, but are more interested in amassing assets than in managing them.
‘Statistics never lie', according to one adage. But for allocators it is crucial to know if managers on a sales pitch are telling the whole truth as well.
Kummer says: "We have been in the business for more than ten years and I have the feeling that the quality of communication and investment processes has been diluted. There are some very good and serious managers.
"But a lot of people are just there for a couple of years, without any real idea of how to run money, even though they are very loud in how they communicate. You can't see through quant screens whether someone is an asset manager or just an asset gatherer."
Bichler adds: "Ten years ago, managers were not so marketing-driven. They were more about the investment process. Nowadays, many quickly exclude themselves [from being considered for allocation].
"A decade ago, you had to really think of the difficult questions, but these days? Just let them talk. The ones that are not so good quickly [spring] their own traps."
He adds that if allocators do not stop to think enough after quantitative analysis, they can simply choose the manager with the best performance.
"But statistics tell you that over ten years, the best managers will also fall to the bottom of the [performance] list.