Allocators often ask for a concise framework that moves beyond marketing decks. This checklist is designed to support that first screening pass.
1) Process Integrity
Review whether the manager can explain its investment process in the same terms across sales, PM, and risk teams. Inconsistency is usually an early warning signal.
Key questions:
- Are portfolio construction rules documented?
- Is there a clear distinction between research inputs and final decisions?
- How often is the process reviewed and updated?
2) Risk Governance
Look for hard limits, escalation protocols, and evidence that risk controls are enforced in stressed markets.
A robust framework should include drawdown triggers, concentration thresholds, and independent monitoring.
3) Implementation Quality
Execution quality often separates average from exceptional outcomes. Assess turnover discipline, liquidity management, and trading governance.
4) Reporting Cadence
Institutional reporting should provide attribution, exposures, and risk diagnostics in a format that investment committees can evaluate quickly.
5) Alignment and Capacity
Confirm capacity assumptions, fee alignment, and team structure. A boutique manager should articulate where strategy scalability begins to impact execution quality.
References
- Internal governance and policy framework templates
- Allocator committee onboarding outlines