Manager Due Diligence

We conduct manager due diligence on a team basis, with five specialized teams, covering the globe and all types of institutional-quality investments:

  • Global Equities
  • Global Fixed Income
  • Alternative Assets
  • Hedge Fund Strategies
  • Defined Contribution Services

We recognize that historical investment performance has proven to be an unreliable predictor of future performance.  Therefore, we believe manager evaluation demands a careful qualitative comparison of candidates, requiring thorough knowledge of each firm's people and processes.

An integral part of our investment manager research is the on-site due diligence process. We find due diligence visits to be a vital source of information regarding the investment management firm. Each of our research teams performs frequent due diligence trips, focusing on managers who manage money for our clients, as well as managers who have piqued our interest with some potential competitive advantage.  Every year, we conduct 3,000 manager visits, including 1,000 in-depth face-to-face manager interviews, with about a third to one-half of those taking place in the managers’ offices in the U.S., Europe, and Asia. The goal is to know the people and understand the processes behind each firm.

We do not practice drive-by due diligence. We do not send junior or unqualified staff member to a manager's office with a checklist of simple questions and requirements to look for.  We spend a majority of our time looking and listening for the more subtle things only professionals with similar experience and qualifications can pick up.

Finally, we satisfy ourselves that the firm is financially stable and assess whether current assets under management are appropriate for the strategy. We are sensitive to the fact that too little, or too large, of an asset base can have a significant effect on performance, and we identify whether there is reason for concern in this regard. This process parallels closely the process by which an investment management firm evaluates the management of companies that are being considered for inclusion in investment portfolios.