Backing a manager is one of the least reversible decisions an allocator makes. Redemption terms, lock-ups and the simple friction of moving capital mean a poor choice can take years to unwind, and by then the damage is done. That is why due diligence deserves more than a polished deck and a good lunch.
A robust process is really an attempt to answer one question in as many ways as possible: is this manager’s success repeatable, or was it a moment that has already passed? Here is the framework we apply before any manager joins the universe, and why each part earns its place.
Start with the track record, but distrust it
The track record is the obvious starting point and the easiest to misread. Three strong years can mean a brilliant process or a single bet that happened to pay off. We care less about the level of returns than their texture: how they were made, in what conditions, and whether the good and bad years line up with what the manager says drives them. A credit manager who thrived in a credit rally has told you very little. One who protected capital when spreads blew out has told you a great deal.
We also look for the fingerprints of luck. A record built on one or two enormous positions is fragile, however impressive the headline. Breadth, the number of genuinely independent decisions behind the returns, is often a better guide to skill than the returns themselves.
Watch the team, not just the founder
Strategies are marketed around a star but run by teams, so we spend as much time on the org chart as the P&L. Who actually makes the decisions? What happens if the founder steps back? How long have the key people worked together, and how are they paid to stay? Turnover among senior investors is one of the more reliable early warnings of trouble, often visible well before performance suffers.
The subtler question is whether the process can survive the person. A repeatable, written-down investment process is worth more than a charismatic individual whose edge lives only in their head, because the former can be examined, stress-tested and continued.
The unglamorous risk: operations
Investors love to debate strategy and ignore operations, which is precisely backwards. Some of the most painful losses in the industry had nothing to do with markets. They came from weak controls, a lax administrator, valuation games on illiquid positions, or a founder with too much unchecked authority over cash. We look for independent administration, a real separation between the people who trade and the people who move money, credible auditors, and valuation policies that do not rely on the manager marking their own homework. None of this is glamorous. All of it is where the quiet disasters happen.
Follow the alignment
The last question is the simplest: does the manager win when you win, and lose when you lose? Meaningful personal capital invested alongside clients, a fee structure that rewards durable performance rather than asset gathering, and terms that do not quietly shift risk back onto the investor all point the right way. Alignment does not guarantee good returns, but its absence is a dependable predictor of disappointment.
Why it never really ends
Due diligence is often treated as a gate you pass once. We treat it more like a subscription. Teams change, processes drift, and a fund that was sound at onboarding can become something else three years later. Every manager in our universe is re-examined against the same framework over time, not just at the start.
The point is not to find managers who look good on a Tuesday in a conference room, but ones who still hold up when conditions turn. You can see the output of that work across the manager universe on the platform, where the funds that survive the process, and the reasons they do, are laid out in one place.