Governance and Due Diligence · Collective Funds
A manager interview should test a repeatable investment process. Specific examples of decisions, mistakes and constraints are more informative than a polished performance story.
Ask how decisions are made
Identify who researches, approves and sizes positions. Ask how disagreements are resolved and what happens when a key person leaves. A team chart is useful only when it reflects actual responsibility.
Request a recent successful decision and an unsuccessful one. For each, ask what was expected, what happened and what changed. The goal is to understand the process, not reward a persuasive explanation after the event.
Connect process to holdings
Compare the stated philosophy with portfolio concentration, turnover, liquidity and benchmark differences. If the strategy claims patience but trades rapidly, ask why. If it claims broad diversification, examine the largest shared risk exposures.
Consider capacity. An approach focused on small or less liquid assets may face different constraints as assets grow. Ask how subscriptions, position sizes and trading costs are managed at larger scale.
Request evidence that can be checked
Useful materials include dated fact sheets, exposure reports, turnover information and documented process changes. Separate the current fund’s record from a manager’s earlier experience or simulated results.
After the interview, write down unresolved questions and the evidence needed to answer them. A favorable impression is not a completed review. The final decision should connect the fund’s behavior and terms to the intended portfolio role.
Try it yourself
A manager describes every past loss as unforeseeable. What should a follow up seek?
Show the worked answer
Ask for the original assumptions, risk limits, warning signals and any documented changes. The aim is to see whether the process learns and controls exposure, not to demand perfect forecasts.
Further reading
Educational material, not a recommendation to buy or sell a fund. Numerical examples are hypothetical. This guide focuses on U.S. collective investment funds and retirement CITs. Terms, eligibility and tax treatment vary by fund, account and jurisdiction.
