Crest

Manager Selection

While others talk about extensive due diligence, we believe that few reach the depth that we do.

Overview of process

Before committing our capital, we rigorously review each strategy and a wide range of prospective managers. We employ uncommonly thorough due diligence comprised of in-depth manager interviews, numerous on-site meetings, intensive evaluations and analysis. In our opinion, our team’s extensive experience allows us to be much more thoughtful than less experienced “check-list” investors.

Our investment team scours each firm and its personnel before investing. On balance, our highly selective process means we review and reject far more than we recommend. Before any manager is selected, all of our operating partners weigh in on each potential manager as part of our intensive review.

Seeing is Believing

While others talk about extensive due diligence, we believe that few reach the depth that we do. Consider the following:

  • We usually meet with a prospective manager at least five times on average before committing capital.
  • We typically meet with personnel from all facets of the organization, not just portfolio managers and marketing professionals. Financial and operations personnel—and especially front line analysts—provide us with a more fulsome window into the organization and its culture.
  • We generally phone investment professionals at the nation’s top endowments and pension funds to discuss prospective managers—rather than simply relying on references provided by the manager.
  • We don’t just review top ten holdings. We normally go the extra mile to phone the CEOs of the portfolio holdings in order to gauge the prospective manager’s performance during meetings.
  • We don’t just ask for the numbers of personnel who have turned over in the past year, we usually contact former employees to find out why they left.

Once we commit, we re-evaluate our investment thesis on an ongoing basis to reaffirm our desire to remain invested or invest in subsequent funds. Analyzing downside potential, uncovering possible changes in manager’s approach, performance analysis and return attribution all play a role. We also stay apprised of personnel turnover, recruiting and succession planning.