Screening emerging managers at scale, for funds of funds and OCIOs

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Screen on whether the plan holds together before screening on proxies. Funds of funds, OCIOs and consultants see far more emerging managers than they can meet. It is tempting to filter by fund size, years of track record or name recognition, because those are easy to apply. Colibrí Institute's research argues that each of those screens may exclude managers whose capabilities deserve a direct review. A plan-coherence screen is just as fast and filters on something closer to what you care about.

A first screen that takes minutes

Every emerging manager's materials state, or imply, a fund size, a number of companies, an initial check size, a target ownership and a reserve ratio. These should fit together. A short arithmetic check catches most plans that cannot work:

  • Capital math. Fund size net of fees and reserves, divided by the number of companies, should produce a check size consistent with the stated stage.
  • Ownership. That check size should plausibly buy the target ownership at the stage's typical round sizes and valuations.
  • Breadth. The number of sectors and companies should be manageable for the team.
  • Capacity. Expected board seats per partner should be workable.

A plan that fails these checks is not necessarily a bad manager, but it is a clear question for the first call. The pages in the Testing the plan section explain each check.

Then screen on evidence of edge

After coherence, look for specific evidence of sourcing access, judgment and value to founders. Ask for examples rather than claims. Keep the evaluation consistent across managers so that results can be compared.

Keeping the process fair and consistent

  • Use the same first-round questions and scoring for every manager.
  • Record why each manager advanced or did not.
  • Revisit declined managers when they raise again, with notes from the first review.
  • Check periodically whether your screens are excluding managers who later perform well.

Related questions

Weighing a manager right now?

Send us the manager you are considering and Dr. Itzel Moncada will give you a free second read on whether their plan holds together and what to ask next. Request a Second Read, or see how we work with allocators.

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