We have the privilege of working with foundations, endowments, and families, and this clientele drives manager research and selection. Our specific client base allows us to focus only on the type of investment managers that are suitable for our clients: higher-quality managers within the broader universe. With $27.2 billion in assets, we also have access to both large, distinguished managers and niche, developing firms.
Our due diligence includes rigorous discovery, on-site and in-person meetings, and a focus on the four Ps: philosophy, personnel, process, and performance. Once a manager is approved, we monitor them continuously, along with other strategies within the manager’s respective asset class. This ongoing due diligence is as important as the initial approval; our decision to keep or terminate a manager is often difficult, and requires close monitoring of both the strategy and the firm so that we can make an informed decision.
We do not use a formulaic approach to putting a manager on a watch list, or for termination. Poor performance is often a symptom of issues arising from changes in people, process, or philosophy at the firm, and we rely on our rigorous diligence process to uncover the real issue. Of note, these are often soft data points that one cannot easily collect by simply reviewing or reacting to traditional investment manager screening tools that, in our opinion, are too heavily dependent on quantitative metrics. As such, terminating a manager is not a black or white decision for us. If a firm is losing people or assets, that is a reason to consider termination. If their style is simply out of favor, our decision is more nuanced.