Golding Capital Partners has developed a structured investment process to assess the quality of a fund manager. All the funds that meet the basic requirements for an investment must go through this process. Among all the fund managers active in the world this enables us to identify the ones which offer the prospect of generating an above-average return with a reasonable level of risk.
The investment process consists of five phases:
1. Market Screening: It all begins with a comprehensive market analysis, drawing on a wide range of sources including contacts to fund managers, intermediaries and other investors. The results are collated in a proprietary fund database. This produces a market overview of all the relevant segments and regions, which is permanently updated and serves as the foundation for the fund pipeline and ranking in the next phase.
2. Side-by-side analysis (preselection): In the next stage we proactively approach interesting individual fund managers. Every fund is discussed by the investment team and given a provisional ranking on the basis of the first meeting and the available fund data. The aim is to identify attractive funds at an early stage and to keep refining the fund pipeline.
3.Intensive Due Diligence: The preselection process is followed by the fund review itself, which consists of extensive number crunching and several meetings with the fund managers. This generally takes place over a period of several weeks or months. The team, investment strategy, track record and terms are all analysed in detail.
- Team: We look for a broadly balanced, sustainable team structure with complementary personalities and skills, a good reputation and outstanding professionalism.
- Investment strategy: The strategy should be consistent, differentiated and clearly articulated and must be compatible with the market situation and the team's experience.
- Track record: The fund should have a verifiable, above-average track record that covers different market cycles. Excessive dependence on individual team members and transactions is not desirable.
- Fund terms / Structure Fees should be reasonable and market standard and the fund should have a suitable legal and tax structure. Significant co-investment by the managers is desirable.
4. Investment decision: The main results of the due diligence are summarised in an investment proposal, which is then subject to a final discussion in the investment team and with the partners in the Investment Committee. A unanimous vote by the Golding Investment Committee is required for a positive decision.
5. Monitoring and relationship-building: The investment process continues well after the investment decision itself. For the duration of the investment the quarterly and annual reports from the target funds and their portfolios are analysed regularly. The Golding investment team also maintains close contact to the managers of the portfolio funds in the course of investor days and informal team visits.