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Policy: Investment due diligence


This Investment Due Diligence Policy documents the University’s due diligence processes for the management of its investment assets. This policy should be read in conjunction with the Investment Policy.


The Investment Due Diligence Policy details:

  • The due diligence conducted during the course of the selection process for investment managers;
  • The objectives and expectations for monitoring external asset managers after their appointment;
  • The regular, on-going due diligence evaluation for all asset managers and investment service providers engaged by the University in the management of the Long Term Investment Pool and General Cash Fund.


This policy applies to all funds held in the University’s investment portfolio.

Policy statement


  1. To implement the investment strategy, the Council must have processes and criterial for selecting each investment. Disappointment with investment manager and investment service providers can be reduced by considering the tangible “4P” (people, process/philosophy/ portfolios and performance) and the intangible “4 Ps” (passion, perspective, purpose and progress). Strategic-partner risk is better understood when complete due diligence identifies operational, trading and regulatory risk.


  1. Prior to the selection of an investment for the portfolio, effective due diligence, commensurate with the nature and characteristic of the investment, are to be undertaken.
  2. The contracts with asset managers and other investment professionals must contain certain protections for the University;
  3. In addition, the Council through its Finance Committee and the Investment Office will hold regular meetings with the portfolio’s investment managers including conducting regular, periodic on site examinations of investment managers and other investment service providers as part of its on-going due diligence.

Appointment of new managers

  1. Due diligence is conducted on new investment managers and investment service providers as part of the selection process. The Investment Office will perform or cause to be performed all necessary and reasonable due diligence with respect to the final slate of asset managers or service providers being considered for engagement by the University. Due diligence includes those processes identified deemed reasonable by the Council after consultation with the asset consultant, auditor, and/or other consultants the Council deems appropriate.
  2. Investment Managers must show to have adequacy in the following areas:
  • Organisational competency
  • Experienced investment staff
  • Performance track record with similar mandates
  • Commercial, operational, legal and taxation issues including holding necessary licenses
  • Information technology systems
  • Risk control procedures
  • Quality client reporting
  1. Prior to appointing an investment manager:
  • the tax structure and implications for a NFP Australian investor will be documented;
  • the legal structure of the investment, including the rights, responsibilities, warranties and representations will be assessed; and
  • the ability of the custodian and its methodology for valuing the investment will be documented.
  1. Prior to funding an investment manager, an operational risk assessment report of the candidate will be requested. The cost of the report to be borne by the candidate.

Operational due diligence

  1. The Investment Office is responsible for conducting reviews of investment managers operations, including middle and back office functions, to distinguish a well-controlled and managed investment operation. Operational due diligence reviews include:
  • Investment manager’s use of technology
  • Investment implementation and operational controls
  • Investment administration and operational controls
  • Business continuity and disaster recovery plans
  • Compliance and audit

Performance due diligence

  1. The Investment Office is responsible for conducting reviews of investment manager performance. Monthly performance reviews include:
  • Reconciliation of the individual manager’s reported performance with the performance for each manager calculated by the custodian.
  • Attribution analysis of individual managers against the designated benchmark.
  1. In addition, quarterly reviews of equity investment manager style characteristics are conducted.
  2. The Investment Office is responsible for conducting performance reviews of investment consultants and other investment professionals annually.

On-going Due Diligence

  1. The Investment Office is responsible for conducting regular due diligence on each manager, asset consultant, direct investment and other investment professionals engaged by the University in the ordinary course of its investment business. The Council and its Finance Committee, are kept apprised of any important facts, industry trends and other events that may reasonably affect the Council’s continued retention of such manager, consultant, direct investment or investment professional. Regular due diligence addresses governance and human resources of the firm as well as over-reaching strategic concerns of the Council and includes the following at the indicated intervals:


Nature of review


Review of the investment mangers’ Internal Controls Report, Certification of Insurance, Business Continuity Plan and Derivative Risk Statements and accompanying Audit Certifications.


Review of the managers’ response to the University’s questionnaire designed to identify significant personnel changes, deficient technical standards and practices, reports filed with regulators in the jurisdictions where the managers reside, as well as to address deterioration of investment returns or unresolved issues relating to a manager.


Review of the investment managers’ monthly reports and attestations as well as the managers’ IMA compliance.

  1. In addition, on-site due diligence evaluations are conducted with both domestic and international investment managers at their primary place of business when practical. Virtual evaluations are conducted quarterly andmay be necessary on a more frequent basis if there have been significant personnel changes, deterioration of investment returns or to the extent there are unresolved issues relating to a manager. The requirement of regular, on-site due diligence with private equity and limited liability partnership managers is met through virtual quarterly meetings, in some circumstances, by attendance to annual business or annual client meetings sponsored by the business entity in which the University has invested.
  2. Quarterly evaluations include the following:
  • Evaluate the investment manager’s staff and how they jointly carry out their fiduciary responsibility to the University;
  • Interview individuals who directly manage the University’s account;
  • Evaluate the significance of personnel shifts or organisational changes that may affect the University’s portfolio;
  • Hold in-depth reviews regarding the investment manager’s philosophy, style and approach to investing the University’s assets; and
  • Develop a clear understanding of the significance of short-term periods of good or poor performance by the manager.

Due diligence reporting

  1. The Investment Office reports any defects to the Chief Financial Officer for review. General findings are reported to Finance Committee not less than once a quarter.

Review of this policy

  1. This policy will be reviewed every three years by Finance Committee or more frequently if:
  • Meaningful change is made to the investment selection process;
  • Relevant legislation or regulation requirements change.
  1. When required, the Corporate Governance and Risk Office will audit and report to the Audit and Risk Management Committee and the Finance Committee on the appropriateness of, and compliance with, this procedure.


Printable version (PDF)
Title Investment due diligence
Document Type Policy
Document Number ANUP_018008
Purpose This Investment Due Diligence Policy documents the University’s due diligence processes for the management of its investment assets. This policy should be read in conjunction with the Investment Policy.
Audience Staff
Category Governance
Topic/ SubTopic Finance - Investments
Effective Date 9 Jun 2022
Next Review Date 9 Jun 2027
Responsible Officer: Chief Financial Officer
Approved By: ANU Council
Contact Area Finance and Business Services
Authority: Australian National University Act 1991
Public Governance, Performance and Accountability Act 2013
Corporations Act 2001 (and associated regulations)
Corporations Regulations 2001
APRA’s Prudential Standard SPS 530 Investment Governance
Plant Breeder's Rights Act 1994
Prudential Practice Guide SPG 530 Investment Governance
Delegations 346,348,350,351, 356, 448-454

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