Manager Due Diligence

We target our manager search for a specific investment mandate. While all available managers are considered, the nature of the mandate quickly narrows down the number of options.

Performance screens are the starting point in the research process. We consider strategies that have outperformed their peer group and benchmarks and rank them based upon risk-adjusted returns. Important criteria are consistency of performance relative to the peer group and benchmark, special factors that impacted performance that may not be repeatable, and the level of assets on which the performance track record was based.

Each firm that passes the initial screens is sent a comprehensive due diligence questionnaire. The questionnaire addresses the firm’s investment philosophy and approach, risk management, personnel, operations, corporate history and legal and compliance issues.

After reviewing the responses, an in-depth interview and/or onsite visit is conducted to develop the qualitative assessment of the manager’s skill and discipline.

Utilizing the qualitative assessment and analytical data, we determine the quality of the organization, the personnel and what we believe is the manager’s “edge” and if it is repeatable.

KAR’s Investment Committee reviews all available data and makes the final decision if a manager should be included on the firm’s investment platform. Once approved, there is ongoing due diligence to insure that a manager continues to meet our standards. We utilize a proprietary database to document all initial and ongoing due diligence.