How Should Past Performance Be Adjusted for Changes in a Manager's Team or Strategy?

Past performance deserves less weight when the people, authority, strategy, or resources behind it have changed. Record what carried over to the current team and what did not. A familiar strategy label alone does not make two records comparable.

Map Responsibility Investment by Investment

For each material investment in the historical record, identify who sourced it, formed the thesis, approved the decision, managed the position, and determined the exit. Ask for an organization chart and deal attribution showing the roles of current and former team members. Find out whether the person presenting the record had decision authority or was part of a larger group.

Review departures and hires by function. A change in the person who set portfolio risk or approved investments may affect comparability more than a change in support staff. Ask what authority moved when someone left, how decisions are made now, and whether the current team has worked together under this process. Confirm whether the governing documents identify key people or address a departure. For a separate review of the operational consequences of a lead departure, see what happens when a lead investor or portfolio manager leaves.

Compare the Old and Current Mandate

Write down the differences between the historical and current strategy. Compare the types of assets, geography, investment size, target market, liquidity, use of borrowing, and risk limits. Ask whether the fund has changed its mandate, the size of investments it pursues, or how much capital it can deploy. A strategy can keep its name while the actual opportunity set or risk changes.

Compare the resources available to the team at each stage. Ask about research, compliance, operations, access to capital, and the systems used to monitor positions. Review changes in ownership and compensation, along with changes to decision rights. Request written process materials from both periods when available, then ask the manager to explain meaningful differences. A prior record may be useful context, but it cannot establish that a changed organization can repeat the same results.

Reassess What the Results Show

Separate the results of continuing team members from those produced by people who have left. Review realized and unrealized positions, losses, capital deployed, and the risks taken to produce returns. Ask which investments best represent the current approach and which do not. Check whether performance depended on one large result, a favorable market, or assumptions that are no longer part of the strategy.

Give post-transition performance its own line in the analysis. A short period may offer limited evidence, so consider the decisions made and the records supporting them, along with the return number. Ask for examples of current investment approvals, monitoring decisions, and responses to a thesis that weakened. If the manager cannot connect today's team and process to the old results with specific evidence, give the historical record limited weight.

Ask for a Bridge, Not a Blended Headline

Request a written bridge between the historical record and the current organization. It should identify continuing people, changed responsibilities, shifts in strategy and resources, and the evidence supporting any claimed continuity. Do not accept a blended return figure that obscures who generated which results or under what mandate. For a broader process to confirm reported figures, see how to verify a fund's reported track record.

Keep a record of what is comparable, what is not, and how each change affects your assessment. This lets your investment committee explain why it relied on some parts of the record and discounted others. Ask the manager to correct any attribution that is unclear before using the history in a decision.

Checklist

• Map sourcing, approval, portfolio work, and exits to named roles.
• Identify who left, who joined, and where decision authority moved.
• Compare mandates, investment sizes, risk limits, and market focus.
• Review changes in resources and ownership, along with incentives and controls.
• Separate results from the continuing team and the prior organization.
• Request a written bridge and record comparability limits.

Go deeper: How can investors assess the depth of a manager's successor bench?.

The historic returns in terms of quantity and quality, on a risk adjusted basis (i.e., Sharpe Ratio, Sortino Ratio, Downside Deviation, etc.) are a second derivative of all of these parts.

Sources: How to Start a Family Office, The Family Office Book, The Single Family Office. Informational only, not financial, legal or tax advice.