Algorithmic Framework for Private Market Manager Selection

This document is an Addepar Research Brief that presents a framework for improving manager selection processes in private markets, particularly focusing on private equity. It outlines the significant impact that effective manager selection can have on portfolio-level returns, emphasizing the need for systematic and data-driven approaches. The brief describes the challenges investors face in selecting managers, including the tendency to rely on past performance, which is not always indicative of future results. It introduces the concept of treating selection processes as algorithms, which can enhance decision-making by ensuring accuracy, consistency, efficiency, measurability, and transparency. The document also discusses common deficiencies in current selection practices and the importance of identifying deeper drivers of manager performance. By adopting this algorithmic perspective, investors can better navigate the complexities of private market investments and improve their overall selection outcomes.