Investors Start Giving Way on Office Visits

Evidence continues to build that investors are getting comfortable parking capital with hedge funds without the benefit of on-site reviews.

Before the coronavirus pandemic, major investors’ due-diligence processes almost universally included visits during which they looked over the managers’ infrastructures and watched their traders in action. Many initially stuck with those policies as stay-at-home orders took effect in March, meaning any fresh commitments had to go to firms they already examined in person.

Now, it appears the long-term nature of the crisis has led to an adjustment. As one prime-brokerage executive put it: “You can’t just keep topping up with the managers already in your portfolio...”