Manager Selection & Due Diligence
One of the most integral services ICG provides is manager due diligence. The investment team at ICG spends an enormous amount of time creating the customized "pool" of managers that we recommend to you. Each year, we conduct extensive qualitative and quantitative analyses of hundreds of money managersóboth traditional and alternative. Only those investment managers meeting our most stringent requirements make our list.
We are continually evaluating potential and existing managers. While ICG is headquartered in Los Angeles and the majority of manager meetings occur there, we also conduct numerous manager meetings on our frequent trips to New York, Chicago, San Francisco, and other global hubs. Due to our extensive network both within the manager community and across the financial services industry, we are able to discover exciting new managers and strategies to incorporate into client portfolios.
Larger consulting models and traditional brokerage firms tend to separate the roles of manager due diligence and portfolio construction. At ICG, the investment professionals who carry out the manager due diligence are the same as those involved in the construction and implementation of client portfolios. Such continuity is critical and enables us to make better and more informed decisions about which managers to recommend to clients.
We build client portfolios from a risk perspective. One of the areas in which we differentiate ourselves is our ability to identify managers who have the skill and experience to control volatility effectively. We strive to locate managers whose performance is driven more by security selection rather than by the market in general, which they cannot control.
Many of the investment managers whom we identify as "best in class" for our clients are also capacity-constrained and therefore tend to exclude larger consulting platforms. Our boutique size and long-term client retention, along with our understanding of alternative strategies, attracts these top managers and allows us to participate where larger or less sophisticated rivals cannot.
Once we identify managers, we are often able to negotiate substantial fee reductions and other more favorable terms. These benefits are passed directly on to clients. We do not receive any direct compensation whatsoever from managers to whom our clients allocate assets.
ICG reconciles each client account on a monthly basis and delivers a detailed monthly performance summary segmented by individual manager. This not only enables our analysts to check that managers remain compliant but also ensures that the client's investment policy statement remains valid and that its objectives are being met.
ICG evaluates it manager allocations in an investment committee which is comprised of the firm's senior investment professionals.