Taking Taste Into Account: Experts Advise A Peek At The Walls

Feb 23 2007 | 11:38am ET

Pension funds looking to hire alternative asset managers sift through a harrowing number of facts and figures before awarding a mandate. Past returns, risk profiles and liquidity all play a major role. But interior design?

Brad Briner of Morgan Creek Capital, for one, suggests keeping your eyes on the walls when visiting a manager. “Pay attention when you’re there, because you might find out that the GP likes to race Formula One and other things like that by seeing pictures in their offices,” he says.

That was just one of the tips offered by some seasoned advisors at a recent gathering sponsored by Incremental Advantage. But while photos may reveal whether a manager is a risk taker or quiet family man, plain white walls may be the ultimate indicator of success.

Those wall hangings are “a pretty good indicator of where they’re spending their time,” claims UBS managing director Mark Bourgeois. “In my view, some of the wealthiest people in the alternatives industry today are some of the most dedicated to their businesses.”

In other words, hobbies are a no-no.

A sneak peak inside a manager’s personal life—one hesitates to call it psychology—isn’t the only benefit of viewing your manager’s turf. Whereas her performance at conferences and in your office is just that—a performance—in her element, she’s likely to be somewhat more candid, preferably as far away from her sales people as possible.

“Wherever you see them without the gloss and marketing spin is most helpful,” recommends Alex Bangash, a managing director at Rumson Capital Advisors.  Briner agrees.

“Go into a manager’s office and just say you’re here to catch up, and see what they talk about,” he suggests. “I recently did this with a manager and I couldn’t get a word in for an hour, because he was so excited about a deal he was involved with.”

Of course, there’s nothing like talking with those in your manager’s firing line—preferably those with nothing to lose—to dig up some truly valuable dirt. Bourgeois advises that investors go after former employees, since they “will more often provide candid feedback.” For private equity funds, Briner recommends talking to the heads of portfolio companies, as they “tend to be the best references because they have an ego stake in it as well with their companies.”


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