Making Better Investment Decisions

Credit Suisse HOLT leverages a comprehensive suite of investment advisory products and services to deliver tailored solutions to institutional investors worldwide. Our objective in working with clients is to use our global database of 18,000 companies and our robust analytical tools to generate unique insights by asset class, country, sector, industry, company, and security. The HOLT™ Methodology employs a consistent, disciplined, and rigorous approach to investment analysis, providing a platform that allows investment managers to focus on their core competency: investment decision-making.

Portfolio Allocation

The HOLT™ Methodology has developed robust analytical tools, that facilitate the evaluation of markets, indices, sectors, and industries around the world. We use this new technology to provide insights into the allocation of capital among asset classes, regions and countries, investment styles and sizes, and sectors and industries.

Case Study:

For the Cyclicals Team of a large global hedge fund, we prepared an evaluation of 22 industries and 81 sub-industries. The construction of each peer group was customized to include the exact constituents specified by the client. The analysis included a review of historical performance, a base case forecast and valuation, the calibration of embedded expectations, and a matrix summarizing the impact on valuation under various scenarios for profitability and growth. Each industry and sub-industry was ranked relative to the others on a series of financial metrics, including economic profitability, valuation, and market expectations. The client requested that we update this analysis monthly and now uses these insights as a central element of their capital allocation process.

Idea Generation

The HOLT™ Methodology and software uses a global database of more than 18,000 companies, each of which has been converted to a common measure of economic performance, as well as powerful screening and scoring tools to help investors identify companies with specific investment criteria. We have corrected the material accounting distortions to put all companies on a "level playing field," facilitating the search for attractive long and short candidates.

Case Study:

For the Global Small Cap Team of a large U.S. mutual fund, we provided a ranking of every company in their investable universe (market cap between US$ 500 million and US$ 5 billion). The objective of this process was to identify the 200 most promising investment candidates from a universe of 3,500 companies. The ranking was delivered in the form of a multi-factor scorecard and the factors were based on empirical testing. The weights of the factors were modified to meet the investment style of the client. Over time, the scorecard was further customized to include a proprietary measure of earnings quality and the risk of financial restatement. This scorecard is delivered monthly and serves as a primary element of the client's idea generation process.

Filter Ideas

HOLT has developed a framework that corrects for accounting distortions in reported financial statements to measure real economic performance in a consistent manner around the world. We have also designed powerful tools that allow investors to easily construct financial forecasts and assess valuation before undertaking more comprehensive analysis. This integrated platform enables investors to identify, more quickly and accurately, the most promising investment opportunities, reducing wasted time and increasing the productivity of the analytical effort.

Case Study:

For a large investor in both public and private equity, we provided data, tools, and consulting services to assist in identifying potential investment candidates. Initially, we provided a screen of companies with financial characteristics that matched the client's investment criteria. Secondly, we used a variety of modeling tools, including ValueSearch™ software, to evaluate the upside potential and downside risk under multiple scenarios. Finally, we conducted more comprehensive reviews of certain companies identified by the client. The client has asked for regular updates to this process and considers it a core element of their idea filtering process.

Fundamental Analysis

HOLT works closely with clients to deliver data, tools, and tailored solutions to enhance their investment process. One area of close client interaction is the design and construction of customized analytical tools to help investors quantify embedded expectations, assess upside potential and downside risk, and better understand the link between corporate performance, competitive strategy, and valuation.

Case Study:

For a large global mutual fund, HOLT was retained to design and develop a proprietary investment platform. HOLT also provided testing, training, and ongoing support of the platform globally. In designing the valuation model, we interviewed more than 40 investment professionals at the client and worked closely with a team of "thought leaders" to construct a valuation framework that reflected the exact specifications of the client. The platform included a comprehensive global database, unique forecast drivers, and a proprietary valuation methodology. The platform also included the ability to save critical data to a central database for use throughout the organization.

Monitor Portfolio

HOLT provides powerful portfolio diagnostic tools and analytics to quickly and easily identify the winners and losers within a portfolio or universe. We also provide objective portfolio evaluations conducted by HOLT Portfolio Consultants, highlighting risks and opportunities within a portfolio and facilitating comparisons with a benchmark or index. HOLT Sector Specialists are available to provide more detailed analyses, focusing on material accounting and valuation issues. We have also developed a framework to identify the quality of earnings and the risk of restatement for companies in a portfolio. These tools and services are highly successful in helping portfolio managers avoid "blow ups" in their portfolio.

Case Study:

The International Team of a large U.S. mutual fund approached HOLT for assistance in a major review of their portfolio. The fund had delivered very strong performance historically (top quartile for the last three, five, and ten years), but was in the bottom 10% of their peer group year-to-date. The client asked HOLT to evaluate the portfolio through the lens of the HOLTTM Framework and provide recommendations on modifications to the portfolio. We employed three different analytical approaches to review the portfolio: HOLT Portfolio Consultant review, HOLT Sector Specialist review, and an objective, quantitative ranking of the portfolio. The client found the mix of objective and subjective analysis helpful and has incorporated the scorecard into their monthly portfolio review. HOLT's review found that the fund's "Blue Chip" strategy was too restrictive, contributing to the sharp underperformance during periods of outperformance by lower quality stocks. The fund has since modified its investment objectives.

Execution Services

Credit Suisse has a broad suite of execution alternatives which provide flexible, low-cost, intelligent execution of client strategies. The Global Portfolio Trading platform provides a complete range of agency and principal trading solutions, utilizing proprietary algorithmic trading models, Pre-, Post and Intra-trade analytics, and our Quantitative Derivatives research to tailor customized trading solutions. AES (Advanced Execution Services) is a leader in providing "smart order routing" to select the exchange, ECN, or ATS with the best price, liquidity, and speed. In equity swaps and structured products, Credit Suisse has one of the most comprehensive platforms on the Street and with ETF traders located around the world, Credit Suisse can provide round-the-clock execution, market liquidity, and market intelligence in nearly all of the U.S., European, and Asian ETFs listed globally.

Case Study:

HOLT was selected by a large global hedge fund to assist in the construction of a risk management overlay program. The client sought to leverage proprietary HOLT insights to hedge securities with certain risk characteristics. The firm was unclear as to the best way to execute the strategies and asked Credit Suisse to summarize the advantages of various execution alternatives. Credit Suisse responded in a coordinated way to provide the client with an execution recommendation using elements of our Cash Trading desk, Advanced Execution Services, Program Trading, ETFs, and Structured Products.