Manager Sourcing

The best investment talent is no longer in the obvious places. Massey Quick constantly seeks out outstanding investment talent, using our deep network of contacts developed over many years to seek out and evaluate managers across all asset classes. We focus on proven performers in all disciplines that manage to absolute return goals, not relative returns.

Our manager research team maintains internally sourced data on more than 100 managers across all styles and strategies. On average, members of our investment committee meet with two to three potential managers each week. Our clients benefit from our analytics and our unprecedented access to talented managers.

Quantitative Screening

Our process begins with a proprietary quantitative analysis that focuses on the specific risk and return metrics of each manager. We develop models to analyze the manager’s net monthly returns since inception and focus on their ability to reduce three key risk measures: drawdown, volatility and correlation.

The purpose of our quantitative due diligence is to gain an understanding of the characteristics of each manager’s returns. We pay special attention to the manager’s ability to deliver alpha above and beyond their benchmark combined with an orientation to capital preservation.

Preliminary Manager Screening

We review all the manager’s documentation and marketing materials and conduct background checks utilizing our vast network of investment professionals and former colleagues.

If we continue to be interested in the manager, we arrange a conference call to confirm our findings and gain additional information.

The next step is to present our findings to the Massey Quick Investment Committee to determine whether to proceed with a formal due diligence review.

On-Site Visits

The next part of our due diligence is qualitative in nature. We always meet with managers in their office so that we can observe the work environment and have face-to-face contact with all key employees. We normally have two or three on-site meetings before completing our due diligence.

The qualitative process focuses on answering questions such as:

• What is the investment process?
• Is the investment process repeatable?
• What risk management protocols have been established?
• Is the appropriate business and administrative infrastructure in place?
• Are the appropriate protocols in place to mitigate against fraud?
• Is the manager willing to limit the size of their fund in order to maximize returns and alpha?
• Does the firm have an entrepreneurial orientation?
• What potential conflicts of interest exist between the manager and their clients?
• How much personal capital do the manager and employees have invested in the strategy?
• Are there procedures in place to ensure staff quality and integrity?

Operational Due Diligence

Our operational due diligence process includes:

• Review of back office procedures, such as pricing and valuation policies, counterparty risk analysis, cash management and trading procedures
• Review of business continuity plans, subscription documents, financial statement and k-1 filings
• Confirmation of the presence of independent and separate third-party service providers in the following capacities: prime broker, custody, accountant, auditor, and legal counsel.

Ongoing Due Diligence

We understand the ongoing due diligence is just as important as the initial due diligence we conduct. At Massey Quick we continue to monitor the quantitative and qualitative attributes that we originally found attractive about the manager to ensure that they remain in place.

This includes but is not limited to

• Monthly tracking by our manager research team
• Ongoing meetings and/or conference calls with each manager
• Periodic on-site visits to review performance, discuss their investment outlook and meet new members of the team.
• Updates to Massey Quick Investment Committee at each meeting.