FROM: Don Pierce, Chief Investment Officer
SUBJECT: Calendar Year (CY) 2026 Investment Manager Due Diligence Schedule and Exception List
RECOMMENDATION:
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Approve the CY 2026 Investment Manager Due Diligence Schedule and Exception List.
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BACKGROUND:
Staff has prepared a proposed CY 2026 Investment Manager Due Diligence Schedule in accordance with SBCERA's Due Diligence Policy (the Policy). The Policy requires on-site or remote investment due diligence for all managers at least once every three (3) years:
The preliminary due diligence schedule for CY 2026 is attached as Exhibit A. Staff anticipates seven (7) due diligence meetings to be conducted in-person or virtually. Additional details related to each investment manager are included in the exhibit. More information regarding the number of expected trips and trip timing will be shared with the Board once that information becomes available, with the intention of providing a date certain in order to facilitate availability.
At the Investment Committee meeting, a question was raised as to whether the SBCERA Due Diligence policy requires that on-site visits be made to corporate headquarter offices as opposed to other corporate offices. The Committee requested that staff review and bring the policy requirements to the full Board for a discussion. The Policy, which is attached as Exhibit D, provides in pertinent part as follows:
On-site or remote investment due diligence is required for all managers, at least once every three years. Typically, managers will be subject to such due diligence every other year. Managers that will not be visited at least once every three years must be approved for exception by the Board. A minimum of one staff member is required at each meeting; consultant support is recommended but not required. The precise manner of conducting investment due diligence shall be decided based upon the following criteria: (1) cost; (2) whether due diligence can be eff...
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