Generally there are four phases to selecting a manager:
- The wide sieve, where we eliminate managers who don’t fit the basic criteria, which may be related to size, historical performance, strategy, terms, etc. This results in the long list.
- The fine sieve, where we narrow down the field to just a few managers using much more detailed quantitative analytics to produce the short list.
- The beauty parade, where in conjunction with clients, we interview and rank managers, subject to due diligence.
- The due diligence, where we will typically pick the top performer from the beauty parade, and perform investment due diligence (check the information the manager has supplied us with about investment strategy and performance), as well as operational due diligence (verify the operational integrity of the business and structures).