Barron's posted an article on Wall Street Redefined.
RELATIONSHIPS COUNT FOR LITTLE on Wall Street these days -- fortunately. A hedge-fund manager can no longer make up for bad performance by buying you a fancy dinner. An institutional salesman can't sustain fat commissions by reciting the morning meeting notes and taking you out on the links.
Contributing to this salutary pay-for-performance trend are "alpha-capture" databases that let money managers track the performance of ideas pitched by hundreds of brokerage salespeople and analysts. These systems take a more scientific approach to the traditionally haphazard process of allocating commissions to brokers. More important, the systems help investors find the outsiders who deliver "alpha," which is the Wall Street term for market-beating returns.
BUT ALPHA-CAPTURE SYSTEMS can motivate institutional salespeople to cull their firm's best ideas. Buyside users of a system tell stockbrokers to enter ideas into a Web-accessible database, along with an investment thesis, trading strategy and conviction level. The ideas get time-stamped and both the broker and the money manager can subsequently track performance in real-time. The returns to an idea can be compared to hundreds of others in the system or to a benchmark. Portfolio managers can zero in on brokers or stocks that interest them. The phenomenon has been called a Wall Street version of fantasy football.
First Coverage's chief executive, Randy Cass, says his belief in the need for such systems originates in his experience as a portfolio manager at the Ontario Teachers' Pension Plan. "I've been there, trying to deal with massive amounts of information being firehosed at me," he says. To cope, most portfolio managers look for ideas from a few familiar people and firms.
When I read this, it would be a dream come true to have a tool like this to detect the Green Hype vs. Green Reality. Having vendors enter their ideas into a web database could make them accountable for their products, detecting Greenwashing and holding the sales team accountable.