#21 Mastering Manager Selection: Larry Powell’s Due Diligence Playbook

Manager Selection & Due Diligence for Alternative Investments

In this episode of Alt Investing Made Easy, veteran allocator Larry Powell shares 40+ years of hard‑earned insights on manager selection, due diligence, and building resilient alternative investment portfolios. From avoiding costly missteps to structuring teams that truly understand risk, Larry distills complex institutional strategies into actionable wisdom—empowering growth‑minded investors to allocate capital with clarity, confidence, and precision.

Key Takeaways 

1. Manager selection is more art than science—trust and fit matter as much as performance history.
2. Due diligence is a mosaic—combine references, on‑site visits, and independent intel to see the full picture.
3. Avoid over‑sharing with managers—let them reveal their approach without tailoring answers to your expectations.
4. Operational red flags matter—office setup, transparency, and staff interactions can signal deeper issues.
5. Build teams with market experience—allocators who’ve managed risk themselves make better evaluators.
6. Skin in the game counts—top managers invest significant personal capital alongside clients.
7. Networking is a due diligence multiplier—industry contacts can uncover truths no pitchbook will reveal.

Chapters

00:00 – Introduction & Guest Background Meet Larry Powell and learn how his career evolved from trading floors to managing billions for pension funds.
03:04 – Early Influences & Career Beginnings From a childhood stock‑picking contest to Chicago’s trading pits.
09:06 – Transition to Trading & Mentorship Lessons from legendary traders and the shift toward building a quantitative framework.
17:50 – Lessons from Early Investments A cautionary tale of fraud, red flags, and the value of separately managed accounts.
30:04 – Role at Texas Teachers Retirement System Scaling alternative allocations and navigating political constraints.
36:59 – Strategic Shifts in Asset Management How asset allocation targets evolved and why hedge funds faced scrutiny.
48:11 – Building a Robust Investment Team Hiring for experience, market fluency, and risk management skills.
54:04 – Evaluating Money Managers The “long story” interview method, probing questions, and reference triangulation.
1:11:41 – Closing & Part Two Teaser

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.”

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