#24 Rules to Live By for Investment Manager Due Diligence with Larry Powell
Larry Powell reveals proven investment manager due diligence rules to spot red flags, ensure transparency, and protect capital in alternative investments. Whether you’re a mid-stage investor, family office, or institutional allocator, you’ll learn practical asset allocation rules, red flag detection strategies, and alternative investment insights to protect and grow capital. Larry shares real world stories from decades in the field — from spotting fraud before it happens to structuring deals for maximum transparency.
Rules to Live By for Investment Manager Due Diligence
In this episode of Alt Investing Made Easy, Larry Powell of LP Institutional shares his hard‑earned investment manager due diligence framework — the same principles he used to allocate billions across hedge funds, private equity, and real estate. You’ll learn how to spot red flags early, structure deals for transparency, and build a trusted network to sharpen your decision‑making. Whether you manage institutional capital or your own portfolio, these insights will help you invest with confidence and protect your capital.
Key Takeaways
- Start Skeptical – Treat every manager as guilty until proven innocent; trust is earned, not assumed.
- Build a Mosaic – Gather intelligence from multiple sources before committing capital.
- Demand Transparency – Position‑level detail and SMAs reduce fraud risk and improve control.
- Act Decisively – Redeem quickly when credible concerns arise; don’t wait for “proof.”
- Leverage Your Network – Peer allocators can provide critical off‑the‑record insights.
- Follow Your Gut – Intuition often catches what data misses.
- Verify, Don’t Trust – Do your own due diligence; never rely solely on consultants.
Chapters & Time Stamps
00:00 – Introduction & why due diligence matters
02:00 – Guilty until proven innocent: the skeptical mindset
06:00 – Building a mosaic of intelligence
13:40 – Avoiding impulsive manager selection
18:00 – Transparency, SMAs, and fraud prevention
27:00 – Networking as a due diligence multiplier
33:00 – Asking probing questions managers respect
39:00 – Red flags, moral compass, and decisive exits
45:00 – Trusting intuition in allocation decisions
47:00 – The role of transparency in risk control
50:00 – SMA advantages over commingled funds
1:03:00 – Legal protections, MFN clauses, and side letters
1:12:00 – Lessons from 2008 and liquidity management
1:18:00 – Ongoing due diligence post‑investment
1:21:00 – Closing thoughts and allocator mindset
Credits
Sponsored by Real Advisers Capital, Austin, Texas
If you are interested in being a guest, please email us.
Disclaimers
“This production is for educational purposes only and is not intended as investment or legal advice.”
“The hosts of this podcast practice law with the law firm, Ferguson Braswell Fraser Kubasta PC; however, the views expressed on this podcast are solely those of the hosts and their guests, and not those of Ferguson Braswell Fraser Kubasta PC.”
© 2025 AltInvestingMade Easy.com LLC All rights reserved
Larry Powell
Chief investment Officer, Macro Investor, Consultant
Experienced leader/mentor of investment teams who has built and/or restructured three different investment organizations. Former Deputy Chief Investment Officer of $30 billion Utah Retirement Systems responsible for the oversight and management of the 17 person investment team and investing in all global public and private market asset classes. Previously Managing Director, External Public Markets at $135 billion Texas Teachers pension fund, managing 10 professionals overseeing all global investments in external managers within equities, fixed income and hedge funds. Recognized by industry peers for influential contributions to better align the interests of investors and managers. Leading industry activist and thought leader advocating and designing innovative private fund fee structures which protect investors while retaining proper incentives to perform. Strong network of peers in the Public Pension and institutional investor community. Institutional Investor Magazine Public Plan Investor of the Year Awards in 2008 and 2009.
