Manager Selection and Ongoing Monitoring
Selection is the easier half. Ongoing monitoring is where most portfolios silently deteriorate.
Key takeaways
- —Quarterly review of every manager against the original investment thesis.
- —Watch-list discipline — managers under review have a defined timeline.
- —Operational due diligence (ODD) is its own discipline, separate from investment DD.
- —Documented redemption decisions are as important as documented entries.
Manager monitoring is the under-resourced phase of most LP relationships. A scorecard at selection captures the moment; an annual conversation captures the present; what gets missed is the drift in between — key personnel departures, strategy creep, capacity overshoot, governance erosion at the GP. Without a structured review cadence, these surface late, often during a market dislocation when redemption is hardest.
Working monitoring builds in a quarterly checkpoint against the original thesis: is the team intact, the strategy unchanged, the operating model sound, the returns within the expected variance? Managers under question move to a watch list with a defined review timeline. ODD reviews — separate from investment DD — should run on a rolling 24-month cycle for every manager above a meaningful position size. The discipline is unglamorous and it pays for itself the first time it surfaces a problem before the market does.
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