This post originally appeared on Fund Marketing Secrets.
Baldwin and Matt interviewed Roland Meerdter, co-founder of Door Ventures. Roland speaks here about streamlining the DDQ process, the origins of Door, how standardized DDQs evolve over time, and how digitalization is affecting the due diligence process.
Highlights of the conversation:
02:16 Analysts are having to cover more, and the due diligence process is an increasing burden on them, too.
04:29 Analysts need to be able to see the evolution of an asset manager, how the manager’s process might change over time.
05:01 The role of the APFI in standardizing the questionnaire.
06:49 Digitalization is playing an important role in the DDQ process.
09:47 Manager selection teams are more likely than they were a few years ago to acknowledge that part of the DDQ is standard amongst competitors.
13:36 One reason the analyst needs visibility into the evolution of a manager’s thesis is so the analyst knows whether decisions that have been made in the past still hold. “The challenge is delta.”
17:42 “There is a balance between the usefulness of the information on the manager research side, and an element of ‘check the box.'”
20:44 “The quality of the questions has gone up. The quality of the responses has gone up.”
23:32 How the standard questionnaire will probably evolve to reflect changing emphases in the industry.
24:31 The central question to ask active managers. It’s where the rubber hits the road.
26:12 Good questions are about digging through the nuances.
27:12 Roland tells a story of interviewing a manager who had studied French literature, and how paying attention to that small detail opened up a new world into the manager’s mindset.
33:24 Asset managers saw Door as not only a way to increase efficiency, but as a way to create a higher level of engagement.
35:02 Roland mentions that customers often use your service in a way you would never have expected.
35:53 “We’re trying to make humans more effective, not necessarily machines more effective.”
38:32 If I’m a manager research analyst, “I don’t want my managers filling out questionnaires. I want them focused on running the portfolio.”
40:50 Small firms deserve the same access to information that the big shots do.
Thank you for your time Roland, it was a great pleasure!
About Baldwin Berges
Baldwin has been active in the investment industry for more than 20 years. His specialty is all about positioning investment opportunities so they are easy to understand and developing strategies and systems to convert more opportunities into business during long sales cycles.
About Matt Krause
Matt began his professional life as an import buyer, and since 2006 has been teaching companies how to connect with their investors and clients better. His clients work in Istanbul, London, and Madrid for companies like Allianz, 3M, P&G, Citibank, and Reckitt Benckiser. He also walked across Turkey and wrote a book about it.