Process
Every manager says they are transparent. Few mean the same thing by it. For us transparency has a functional definition: we should be able to answer, within a day, what our aggregate exposure is to a given issuer, factor, counterparty or scenario. Data that does not contribute to answering such a question is administrative overhead, not transparency.
What we ask managers for
At minimum, monthly performance with attribution by strategy or sub-book, gross and net exposure, leverage, and a summary of the largest contributors and detractors. We want liquidity information — what proportion of the book could be exited in a day, a week, a month, under normal conditions and under stress — and counterparty exposure by financing provider.
We ask to be told about material changes promptly rather than at the next reporting date: departures of investment or operational staff, changes to the administrator, auditor or prime broker, significant redemptions or concentration in the investor base, regulatory contact, guideline breaches, and any change to how the strategy is being run.
Where we hold a managed account we receive position-level data daily. Where we hold a commingled fund we discuss what position-level or risk-aggregate reporting is possible under a confidentiality arrangement. We are pragmatic about this: we do not need real-time positions from a manager whose strategy would be harmed by disclosure, but we do need enough risk aggregation to manage our own portfolio.
What we do with it
Manager reporting is aggregated into a single portfolio view. That view is what allows us to identify exposures no individual manager would flag, because from their perspective the position is modest and from ours it is repeated five times. It also drives our scenario analysis and our rebalancing.
What we provide to our investors
Our investors receive regular reporting covering portfolio performance and attribution by manager and by return driver, changes in the manager roster with the reasoning behind them, the current risk budget and how actual allocations sit against it, liquidity profile of the portfolio, and commentary on the conditions we are watching.
We also provide something less common: a plain account of what went wrong. Where a manager disappointed, where our thesis was mistaken, or where a decision looks poor in hindsight, that appears in the report. An allocator whose reporting contains only successes is either extraordinarily fortunate or not telling you everything.
The test of a reporting relationship is whether bad news arrives early. Everything else is formatting.
Confidentiality in both directions
Manager data is held under the terms agreed and is not shared beyond the individuals who need it. We do not disclose our manager roster publicly, and we do not name our investors. Where a manager requires specific protections around position data we will agree them in writing before receiving anything.
Meetings
Reporting supplements conversation rather than replacing it. We hold scheduled reviews with each manager and expect direct access to the portfolio manager, not only to the investor relations function. Managers who route every substantive question through a client-facing intermediary make it harder for us to hold the position with conviction.