Episode summary
How Top Investment Consultants Pick Managers | The Future of Due Diligence with Callan
Dakota Live!
· · Hosts: Robert Morier · Guests: Ashley Kahn, Tony Lissuzzo
Summary
Callan’s Ashley Kahn and Tony Lissuzzo describe manager selection as an apprenticeship built on repetition, pattern recognition, and judgment rather than formulas alone. Kahn says private equity diligence depends on repeatability, clarity, and confidence, especially when information is limited and meetings are the first real test of a manager’s story. Lissuzzo adds that consultants also have to translate that research into portfolio context, deciding not just whether a manager is good, but whether it fits the client’s objectives and risk budget.
The conversation draws a sharp line between confidence and ego. Both guests say strong managers can be easy to spot, but arrogance often signals deeper problems. They also stress that consensus matters: the best decisions are usually team-based, with multiple researchers weighing the merits and risks before anything reaches a client. In private markets, access matters, but only if it is paired with real diligence.
On hedge funds and risk, Lissuzzo argues that markets have become more efficient, reducing easy arbitrage and making leverage-plus-illiquidity the combination allocators watch most closely. Kahn says private equity still offers wide performance dispersion, so the work is to identify the few managers with durable, repeatable edge and then document why they belong in the portfolio.
Key takeaways
- Kahn says private equity diligence hinges on repeatability, pattern recognition, and whether a manager can do the same thing successfully over and over.
- Lissuzzo says the hardest part of manager selection is not finding a good manager, but choosing the one that fits the portfolio and client needs.
- Both guests say confidence is useful, but ego is a red flag because it often shows up in how managers treat others and explain their process.
- Lissuzzo argues the biggest market risks often come from the combination of illiquidity and leverage.
- Kahn says access matters in private markets, but only when it leads to access to truly differentiated managers rather than herd behavior.
Notable quotes
“how you create that mosaic, how you ask the second question, how you dig deeper”
“I think it it takes time to develop really that overall investment judgment where you can come away from a meeting”
“performance is good. If performance isn't mentioned in the deck, that's like a clear sign”
“When I see the crossing of those two, that's where I see risks. you don't know if it's a risk that's going to blow up or not”
How the episode opens
Welcome to the Dakota Live podcast. I'm your host, Robert Morier. The goal of this podcast is to help you better know the people behind investment decisions.
We introduce you to chief investment officers, manager research professionals, investment consultants, and other industry leaders to help you sell in between the lines and better understand the investment sales ecosystem. If you're not familiar with Dakota and our Dakota live content, please visit our website at dakota.com. Before we get started, I need to read a brief disclosure.
This content is provided forformational purposes and should not be relied upon as recommendations or advice about investing in securities. All investments involve risk and may lose money. Dakota does not guarantee the accuracy of any of the information provided by the speaker who is not affiliated with Dakota.
Not a solicitation, testimonial, or an endorsement by Dakota or its affiliates. Nothing herein is intended to indicate approval, support, or recommendation of the investment adviser or its supervised persons by Dakota. Today's episode is brought to you by Dakota Marketplace.
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Welcome back to Dakota Live. Well, today's episode is a little different. It starts in a classroom at Drexel University.
Over the past 10 weeks, we have been running an experiment. We took a group of students uh many of whom who have never sat in front of an investment committee before and asked them to do something in the industry that typically takes years to learn and that's to underwrite an asset manager.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- manager selection
- private markets due diligence
- hedge fund manager evaluation
- portfolio construction
- illiquidity and leverage risk
Companies and tickers mentioned
- NTRS
- Callan
- Cambridge Associates
- Northern Trust
- Drexel University
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Dakota Live!, this episode and its artwork belong to Robert Morier. Octagon is not affiliated with the show; this page is an independent summary.
