Schroders heads the pack on fiduciary risk rating

Schroders Asset Management has topped a list of more than 50 major managers active in Asia on fiduciary risk control, FinanceAsia has learned.

Swiss-based rating agency RCP & Partners rated Schroders AA2 on overall organizational risk and investment performance risk controls - just two grades below the highest rating of AAA, which no manager has been able to achieve.

Only 35 of the managers were publicly rated, and of this number only Schroders and Indocam were graded as 'very good'. The rest were ranked 'good'. The rating agency did not disclose the number of managers falling below the scale.

RCP & Partners gave the managers a fiduciary risk rating based on their ability to safeguard investors' assets in areas that could impact on investment returns in the next 12 months. The fiduciary risk profile takes into account structural factors such as the firm's level of administration support, checks and balances in the decision-making process, compliance and corporate governance.

On the investment performance area, RCP & Partners examines the managers' experience, their investment process, consistency in returns, product range and profitability.

The agency stresses the rating is not an indication of a manager's actual investment returns, which is based on past performance. Instead it forewarns investors about how the manager is likely to perform in the future based on its organizational structure and investment process.

Fiduciary risk is a relatively new concept in Asia, compared with Europe and the United States where institutional investors require managers to be rated in this area before giving out mandates.

It is understood Schroders and RCP & Partners will announce their ratings in Hong Kong early next week.