In late 2019, we sent out an email blast, the gist of which is that the RFP is dying.
We said that the consultant class no longer needs them; that the investment databases are the future of the due diligence process.
We were, quite frankly, wrong in many respects.
While it is true that narratives, returns, fees, portfolio characteristics, succession planning, emergency contingencies - all the data traditional RFPs contain are now (or should be) available 24-7-365 in your database profiles, the truth is that the FRP/DDQ is alive and well and still a cornerstone of the search and assess process.
We were educated about this truth in a demo we were presenting for our Vault for a global asset management firm. They informed us that they were completing 800 DDQ’s every year, with the majority of them for institutional investors for assessment and retention evaluation
Over the long term, we still believe that we are correct about the increasing role the databases will play in the industry due diligence process. But like the pitchbook (another overused and poorly understood marketing piece), the DDQ will remain a fact of life for the foreseeable future.
But this got us thinking: why would a consultant, with access to all the data, still require a manager to complete a DDQ every quarter?
The answer to us is that the database technology they use isn’t compatible with any usable sort of reporting program or tool. So they must use the old-fashioned Word documents that have to get filled out by the manager and sent along for the investor’s assessment process.
There is a much better way, for both the consultant AND the manager.
There’s no question that we at APX Stream have long been the experts with regard to keeping up with the evolution and the complexities of the investment databases. And those complexities are growing, and that evolution ongoing, and we remain strongly positioned to keep ahead of the curve.
If we can remain coded to the databases, able to move millions of data points every month and quarter from the Vault to databases spread across the globe, we realized that it’s not at all difficult to code to a couple of Word documents.
It’s just one more example of how the Vault can function as the Swiss Army Knife for an investment manager’s broad data strategy.