Unsung Heroes in Investment Management
As a former head of manager research and analyst, I know the importance of receiving timely and high-quality information from investment managers. While information in DDQs is widely seen by the manager research community, the authors and architects of that content are not.
Due diligence is a multi-layered exercise – understanding how all of the information and data points hang together into a coherent whole (or not!) is the ultimate goal.
“Behind the scenes,” thousands of people at investment management companies globally ensure that the information keeping research analysts informed is accurate and thorough. It is difficult work requiring high levels of organization, intellectual rigor and project management skills. These individuals understand their firms and product ranges down the finest nuance. They know where to find information to respond to client inquiries and prove their ability to navigate complex organizations. They are trusted partners of both investment management as well as client-facing teams.
I must admit, in the thousands of DDQs and related documents I sent for completion during my career as an analyst I almost never spoke with the people who were responding to those documents! (and when I did, it was primarily boutiques where people were wearing many hats).
Come to find out, the vast majority of my analyst peers around the world haven’t either. More recently, I have had the opportunity to speak with many people in these roles – I have learned a lot and gained a new appreciation for the long hours and dedication they demonstrate.
The importance of the information they procure from the depths of the company and provide to analyze through documents also shouldn’t be underestimated by the sales and client service folks in asset management companies. Though a DDQ is not the be-all/end-all for decision-making, it does underpin many analysts’ methods for understanding an investment firm and its products. A lousy DDQ response has consequences. The stability and quality of an organization is highly correlated with the thoroughness and accuracy of DDQ responses.
Due diligence is a multi-layered exercise – understanding how all of the information and data points hang together into a coherent whole (or not!) is the ultimate goal. In many ways, information found in DDQs is the foundation upon which manager due diligence is built. Recognizing and supporting the people involved in the processes of fulfilling requests for DDQ responses is important in an industry in which it is not just the people on the ‘front line’ who make the greatest contributions to client success.
Roland Meerdter - Co-founder at Door
- Due Diligence
