Weights — Fund · Family Office App Demo

Section Weights

Manager & Team

20%

Strategy & Edge

16%

Track Record & Performance

16%

Risk Management & Exposure

14%

Terms, Fees & Liquidity

12%

Operations & Service Providers

12%

Portfolio Fit

6%

Legal, Structure & Tax

4%

Total Section Weight 100%

Section weights are relative — they'll be normalized to 100% during scoring.

Portfolio manager's track record IN THIS STRATEGY

%

Not their career generally — the exact strategy this fund runs. Where did they run it, for how long, with whose money?

GP commitment — how much of the manager's own money is in the fund

%

A meaningful share of their net worth, or a rounding error? Cash, or fee-waiver 'commitment'?

Integrity, transparency, and quality of disclosure

%

Do they volunteer the bad quarters? Will they discuss losers in detail? Anything surface late that should have come first?

Depth of the investment team beyond the founder

%

Who else generates ideas? Analyst tenure and coverage? Or is this one person with support staff?

Background and regulatory history (Form ADV, SEC/FINRA, litigation)

%

Pull the ADV and read Item 9 disclosures. Check BrokerCheck and PACER on every principal.

Team stability and turnover

%

Who has left in the last 3 years, and why? Departures cluster before problems surface.

Firm business stability (AUM trend, revenue, is the firm profitable)

%

Can the management fee sustain the team at current AUM? A shrinking firm cuts research first.

Compensation alignment across the team

%

Do analysts share in performance? Or does all economics sit with the founder?

Key-person risk and succession

%

If the PM stops, does the fund stop? Is there a key-person clause that lets LPs out?

Question weights are relative within the section.

Clarity of the strategy — can you explain in plain English how it makes money

%

If you cannot explain it to a partner in three sentences, either it is too complex or they are hiding something.

Source of edge, and why it persists

%

Information, analytical, structural, or behavioural? Who is on the other side of the trade, and why do they keep losing?

Repeatability and process discipline

%

A written, followed process — or a few brilliant one-offs? Would a different analyst reach the same decision?

Style drift — does the current book still match the mandate

%

Compare today's positions to the strategy they raised on. Drift usually follows a bad stretch.

Capacity — does the strategy still work at this AUM

%

Has AUM outgrown the opportunity set? Are they closing to new money, or raising as hard as they can?

Portfolio construction — position count, sizing, and concentration

%

How many names? Top-10 as a share of the book? Is sizing rules-based or discretionary?

Dependence on a particular market environment

%

Does this need falling rates, rising vol, or a specific regime? What does it do when that reverses?

Research process and idea sourcing

%

Where do ideas come from? Screens, networks, primary research? What kills an idea?

Use of leverage, derivatives, shorting, and illiquids

%

What instruments are permitted, and what do they actually use? Any illiquid sleeve inside a liquid fund?

Question weights are relative within the section.

Length, relevance, and auditability of the track record

%

Audited, same team, same strategy, same firm? A record that is none of those is a marketing document.

Net returns vs. the right benchmark and peer group

%

NET of all fees, against the benchmark that matches the exposure — not the S&P for a market-neutral fund.

Drawdown history — depth, duration, and recovery

%

Worst peak-to-trough, how long to recover, and what they did during it.

Risk-adjusted returns (Sharpe, Sortino, vol)

%

Is the return earned per unit of risk, or just leverage and beta dressed up as skill?

Consistency — breadth of contribution, not a few lucky positions

%

Strip the top 3 winners and top 3 years: what is left? A handful of hits is not a process.

Attribution — do returns come from the stated edge

%

Long book vs. short book, sector vs. selection, alpha vs. beta. Does the P&L match the story?

Behaviour in stress periods (2008, 2020, 2022)

%

Did the strategy do what it claimed it would when it mattered? If too young, what is the closest proxy?

Are the returns independently verifiable

%

Administrator-struck NAVs and audited financials — or a manager-produced spreadsheet?

Question weights are relative within the section.

Risk framework — limits, monitoring, and who owns it

%

Written limits? Daily monitoring? What actually happens when a limit is breached?

Liquidity of the book vs. the fund's redemption terms

%

Days to liquidate the book at normal volume vs. what LPs are promised. This mismatch is what gates funds.

Gross and net exposure limits, and adherence to them

%

Typical and maximum gross/net. Has the max ever been exceeded, and what happened?

Leverage — level, source, and financing terms

%

How much, from whom, and can it be pulled? Margin terms are the transmission line in a crisis.

Concentration limits — position, sector, and factor

%

Max single position? Any accidental factor bet (momentum, small-cap, one theme) running the book?

Counterparty and prime-broker risk

%

How many PBs? Where does cash sit? What happens if a counterparty fails?

Stress testing and scenario analysis

%

Do they run real scenarios, and do the results change behaviour — or is it a slide?

Independence of risk oversight from the PM

%

Can anyone force the PM to cut? A risk officer who reports to the PM is not oversight.

Question weights are relative within the section.

Incentive fee, hurdle, and high-water mark

%

Is there a hurdle at all? A real high-water mark? Crystallized annually or on realization?

Lockup, redemption frequency, and notice period

%

Hard or soft lock? Monthly/quarterly/annual? Notice days? When could we actually get money back?

Gates, side pockets, and suspension rights

%

Investor-level or fund-level gate? Can the manager side-pocket at will or suspend NAV? Read the actual clause.

Management fee

%

On committed or invested capital? Does it step down? What does it fund at this AUM?

Total expense load beyond the headline fees

%

Research/data costs, admin, audit, legal, organizational costs passed through. Ask for the actual expense ratio.

Fee terms vs. peers running this strategy

%

Are we paying above market? Is there a founders' or early-investor class we qualify for?

Most-favoured-nation and side-letter terms

%

Do other LPs have better terms? Is there an MFN, and at what commitment size?

Minimum investment and our resulting share of the fund

%

Does the minimum fit our sizing? Would we be an uncomfortably large share of a small fund?

Question weights are relative within the section.

Independent third-party administrator

%

Who strikes NAV? A known administrator — or the manager's own back office? Confirm DIRECTLY with the admin.

Reputable independent auditor with clean opinions

%

Recognized audit firm, no qualifications, no recent switch. Call the auditor to confirm the engagement exists.

Independent custody of assets

%

Are the assets held away from the manager? A manager with custody AND pricing AND reporting is the Madoff shape.

Valuation policy — who prices hard-to-value positions

%

Written policy, independent pricing sources, and who signs off on Level 3 marks?

Compliance function and CCO

%

Dedicated or outsourced? Personal-trading policy? When was the last mock exam or SEC exam, and what came of it?

Investor reporting — quality, frequency, and transparency

%

Monthly letters with real content? Position-level or exposure-level detail? Will they take a call on a bad month?

Operational due diligence findings

%

Have we (or a third-party ODD provider) done an on-site? Any findings outstanding?

Cash controls and segregation of duties

%

Who can move money? Dual authorization? Can one person instruct a wire?

Business continuity, cyber, and technology

%

What happens if the office is unavailable? Systems modern? Any incident history?

Question weights are relative within the section.

The role this fund plays in our portfolio

%

Return engine, diversifier, downside protection, or cash-plus? If you cannot name the role, do not buy it.

Correlation and overlap with what we already own

%

Does it duplicate our direct book or existing managers? Look at actual positions, not the label.

Liquidity fit with our own needs

%

Does the lockup fit our commitments and cash cycle? What if we need this money early?

Sizing — is the right position size available to us

%

Does the minimum force a bigger bet than we want? Can we start small and add?

Access — is this an allocation worth having

%

Closed/hard-to-access, or perpetually open? Being let in easily is information.

Our ability to monitor it once invested

%

What will we actually receive, how often, and who reads it? An unmonitored fund is a blind position.

Question weights are relative within the section.

Fund structure and domicile

%

Onshore LP vs. offshore feeder vs. master-feeder? Which vehicle should WE be in?

LPA / offering document terms and investor protections

%

Amendment rights, indemnification scope, key-person and no-fault provisions. Did counsel read it?

Tax treatment for our entities

%

K-1 timing and complexity, UBTI for tax-exempt entities, PFIC/blocker needs, state filings created.

Regulatory registration and reporting status

%

SEC-registered RIA or exempt reporting adviser? Any registration the strategy should have but doesn't?

Governance — LP rights, advisory board, removal provisions

%

Is there an LPAC? Can LPs remove the GP or wind the fund down? Any voice at all?

Question weights are relative within the section.

Overall excitement about this deal

%

On a visceral level, does this fire you up? Or feel like settling?

Trust in the people across the table

%

Would you want to be in a foxhole with these people? Eye contact, handshake feel.

Would this be your only investment this year?

%

If you could only make ONE bet, would it be this one?

Portfolio fit and strategic alignment

%

Does this complement our existing investments? Fill a gap?

LP/partner explainability

%

Could you confidently explain this to investors at the next meeting?

Too-good-to-be-true meter

%

10 = no suspicion at all. 1 = something feels off. Trust your spider sense.

Timing and urgency — is the window right?

%

Right time in the cycle? Market conditions favorable? Or are we chasing?

Differentiation vs. other opportunities

%

How does this compare to other deals you've seen recently?

Sleep-at-night factor

%

Can you sleep well after wiring the money? Or will it keep you up?

Regret minimization — would you regret passing?

%

In 5 years, would you kick yourself for not doing this deal?

Information quality — do you know enough?

%

Do you feel well-informed? Or are there big unknowns?

Question weights are relative within the section.

🏛️ Fund weights