One of the most important decisions we make is determining which asset managers to allocate capital to within the highest opportunity sectors of the global capital markets.
We aim to build partnerships with investment managers whom we believe offer the greatest potential for outperformance and whose expertise serves as a valuable input in our investment process.
Our investment team is diligent in establishing and fostering relationships with prospective investment managers and completing rigorous due diligence and analysis. We typically develop relationships over multiple years prior to investment in order to build a strong partnership and deep understanding of the manager’s philosophy and approach. We strive to understand how a manager thinks, to know how their portfolio will behave in any given circumstance, and to comprehend the risks the portfolio takes versus the performance expected.
Once invested, we continuously monitor these investment managers to ensure that they fulfill their intended role in our portfolios. Our manager assessments range from the largest most recognized names in the markets to the smaller, more niche up-and-coming managers. The largest managers often do not meet our rigorous screens due to their over-sized asset base, lack of capacity, or deteriorating track records. Therefore, a major focus is identifying emerging managers in niche corners of the market with differentiated strategies who are poised for sustained growth.
When we have a strong alignment of interests with a high-conviction manager, we will consider co-investing as it provides us the opportunity to upsize a manager’s best ideas within our portfolio while leveraging their expertise and understanding of the investment. Additionally, co-investing provides an opportunity to deepen the manager relationship and our understanding of how they invest.
In summary, we invest with people, particularly their philosophy, process, and portfolios—not just their track records.
Manager Selection Criteria: The Four P’s
What inefficiencies is the manager seeking to exploit?
What is the background and in-depth skill set of the investment team?
How does the manager source, research, size, and monitor portfolio opportunities?
Are the sources of returns consistent with the manager’s philosophy, process, and risk profile?