DD Stages

QUANTITATIVE DUE DILIGENCE We review information and data which includes past performance, consistency, attribution of returns, exposure level and liquidity profile of given fund's portfolio. A manager should eloquently describe his strategy and articulate the underlying portfolio positioning as well as where the risk and return attribution reside.

QUALITATIVE DUE DILIGENCE Our goal is to determine whether a manager has exceptional leadership capabilities, reputation, integrity, passion, investment and business skills.  We conduct in-depth discussions with investment and operational teams on-site in order to assess their strengths and weaknesses. We strive to understand how the manager reacts to drawdowns and how they claim a competitive edge. We seek to identify a style drift, liquidity mismatching and potential conflict of interests among other red-flag items.
STRUCTURAL DUE DILIGENCE  We collect manager information from independent parties through a set of questionnaires (auditor, administrator, prime broker, valuation firms). Some of the items we examine are structural integrity of the firm (front / middle / back offices), oversight, controls, segregation of duties between investment and operation teams, quality of service providers and scalability. We keep our eyes on business and counterparty risks and veto items such as no independent administrator and no independent valuation.