Chronicles: Issue 13, March 2021

Let’s face it, we’re all nerds and “numbers people.” As investment professionals, we like to follow the ups and downs of major indices, rely on our long list of ratios, and get on our high horses (or Twitter) when we notice a trendline or performance indicator that others are missing. Sometimes, however, our knack for the numerical gets in the way. But, in manager selection, we have to remember we are hiring teams, full of human decision-makers. That must count for something, right?

Due diligence is often said to be a mix of art and science. While there are a lot of historical quantitative statistics we can measure, the qualitative elements may end up being the differentiator on a forward-looking basis. This edition of Chronicles seeks to provide some helpful resources to aid in the due diligence process. Starting with the results of CAIA Association’s recent research (informed by hundreds of CAIA Members), which focuses on the drivers behind manager selection, we then delve into some relevant industry insights from fellow practitioners. These resources can help you take a closer look at due diligence and further explore some of the less quantitative—though arguably more influential—aspects of the process.

The CAIA Content Team

John L. Bowman, CFA, Senior Managing Director, TwitterLinkedIn

Keith Black, PhD, CFA, CAIA, FDP, Managing Director Content Strategy, TwitterLinkedIn

Guowei Jack Wu, CFA, Content Director, CAIA APAC, TwitterLinkedIn

Aaron Filbeck, CFA, CAIA, CIPM, FDP – Director, Global Content Development, TwitterLinkedIn