We propose and test a framework of private information acquisition and decision timing for asset allocators hiring outside investment managers. Using unique data on due diligence interactions between an institutional allocator and 860 hedge fund managers, we find that the production of private information complements public information. The allocator strategically chooses how much proprietary information to collect, reducing due diligence time by 18 months and improving outcomes. Funds selected by the manager outperform those not selected by 9% over 20 months. The outperformance relates to the allocator learning about fund return-to-scale constraints and manager skill before other investors.

中文翻译：

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寻找财富：机构投资者如何挑选资产管理人？

我们为聘请外部投资经理的资产配置者提出并测试了私人信息获取和决策时机的框架。使用机构配置者和 860 名对冲基金经理之间尽职调查互动的独特数据，我们发现私人信息的产生是对公共信息的补充。分配者战略性地选择收集多少专有信息，将尽职调查时间缩短 18 个月并改善结果。经理选择的基金在 20 个月内的表现优于未选择的基金 9%。出色的表现与分配者在其他投资者之前了解基金规模回报率约束和经理技能有关。