{{ p.title }}
{{ b.text }}
{{ g.text }} {{ g.text }} {{ g.text }}
| {{ c.v }} |
|---|
{{ b.note }}
{{ p.kfImg.note }}
A Five-Step Fund Manager Review for Endowments
Adapted for endowment and foundation investment staff from Chapter 10 of The Single Family Office by Richard C. Wilson.
Every endowment gets more manager pitches than it can review. My team broke the first review down into five steps. It is not the whole diligence process, but it is the frame almost every serious allocator I know follows.
Step 1. The one-pager
A tear sheet or teaser. Performance, team, process, structure and contact details. An experienced reviewer can read one in 5 to 10 minutes and decide whether to keep going.
Step 2. The pitch book
If the one-pager clears, the deck comes next. It covers the team, the edge, the process, risk controls, operations, service providers and examples. By the end of the deck you should have a good sense of whether this could be a fit.
Step 3. The first call
Most managers are far from campus, so a call is usually step three. Calls run at least half an hour and sometimes for hours. This is where you poke holes. Pitch books are built to impress. The call is your chance to test that.
Step 4. Full diligence
Now the due diligence questionnaire comes out. A DDQ can run 50 to 200 questions on structure, track record, audits, references and operations. Larger managers have staff who turn these around fast. Smaller shops take longer. Many allocators use a consultant or staff member who knows how to read DDQ answers closely. Then comes the onsite visit, to confirm nothing was overstated.
Step 5. The final call
Bring the case to the investment committee. The CIO or staff lead presents the structure and the reasons. If questions remain, go back and dig more. If not, move to contracts.
The habit that matters most
Many of the strongest family offices I know credit one thing for their results. They are willing to walk away, even at step five. Endowment committees should keep that option open until the documents are signed.
Where this fits in an endowment
Steps 1 and 2 are usually staff or OCIO work. Step 3 may include a committee member for larger commitments. Steps 4 and 5 feed the committee memo.
Frequently asked questions
How many managers make it past step 1?
It varies, but most allocators reject the large majority at the one-pager stage.
Is the onsite visit really needed?
For a new manager relationship, most institutional allocators treat it as standard.
Who reviews operations, not just investments?
Many endowments run separate operational due diligence, in house or through a specialist firm.
Sources
- The Single Family Office, Chapter 10, Richard C. Wilson .
More on manager selection and diligence
- How Endowment Staff Read a Fund One-Pager in Ten Minutes
- The Onsite Visit and the Discipline to Walk Away
- Working Through a Due Diligence Questionnaire as an Endowment
- Chasing Performance and Mean Reversion in Endowment Portfolios
- Consistent Performance Measurement for Endowments
- The Downside Math Every Endowment Committee Should Know
