Investment manager oversight that checks every sub-adviser's word against your own holdings, before the board meets
Every sub-adviser's word checked against your own holdings, before the board meets.
See one case, screen by screen ↓Investment manager oversight is the ongoing work of checking that the outside managers, or sub-advisers, running a fund's money follow their agreement, the fund's investment restrictions and the fund's compliance policies: collecting their certifications, guideline reports and due diligence questionnaires, testing what they say, and reporting to the board under Rule 38a-1. It is also called sub-adviser oversight, or external manager monitoring when the managers run an institution's own money. Investment Manager Oversight gives that team six agents that chase, read, re-test on the fund's own holdings and draft the CCO's section, while an analyst decides, a manager checks and the CCO signs.
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Investment manager oversight starts the day after quarter end. A fund that hires sub-advisers stays responsible for what they do, so the oversight team asks each one for a signed compliance certification, three monthly guideline reports, policy changes and, on the anniversary of the sub-advisory agreement, an annual due diligence questionnaire. The analyst chases them by email from a tracker spreadsheet, reads PDFs, spreadsheets and scans, some in German, French or Japanese, and files each one by hand. Then the CCO's section of the board book is drafted in a word processor, with the figures typed again.
The risk is in what nobody re-tests. A sub-adviser certifies "no breaches" against its own definitions, while the agreement defines an emerging market by one index provider and a rating bucket by the agencies its schedule names. A DDQ answer contradicts a Form ADV amendment and nobody compares them. A policy change is filed but never put to the board for approval under Rule 38a-1(a)(2). The board is told what the sub-adviser said, and the examiner finds the difference later.
Estimated split of about 1.5 analyst days (12 hours) per sub-adviser per quarter, by hand and with the solution; the 2-hour total is the design target.
Six agents chase, read, cross-check and draft; an analyst decides, a manager checks, the CCO signs.
Quillfield Capital's Funds Trust has 23 sub-advisers running 38 sleeves, $23.8 billion at September 30. Certifications were due October 14; the board book is due October 29 for the November 12 board meeting. Here is how investment manager oversight runs in the working solution, screen by screen: the agents do the chasing, reading and re-testing, and people ask, approve and sign.
Tomás opens Today: 87 of 115 Q3 steps done, 11 of 23 quarters signed off, 5 exceptions open (2 high), 2 late, board book October 29. "Needs you" lists one next step each, starting with Marrow Bay. Beside it, the agents' overnight work, every line cited: the Cross-check re-ran 412 coded guidelines, the Verifier re-derived Marrow Bay, the Reader read Marrow Bay's certification and is reading Nordlys's Norwegian reports.
Chaser agent: “Overnight the Cross-check found one thing that matters: Marrow Bay certified no breaches, and our own holdings disagree. Everything else moved as planned.”
Every sub-adviser is a row of five stones: Requested, Received, Read, Exceptions, Signed. The agents move the stones on their own. Ashby Rook's guideline reports arrived password-protected, Sorrel Creek's certification is 4 days late and Ostrander & Vey's annual DDQ is late; a drafted request waits beside each late stone with Send and Edit. Harrowgate, Maison Corvel and Quarrystone are read and clean, ready to sign off in bulk.
Chaser agent: “All 23 requests went out on October 1. Two are late; their reminders are drafted beside them.”
Reminder 2 to Bryan Castellanos, Sorrel Creek's CCO, copies Elena Sorensen and uses template Reminder 2 · v3, approved by Ruth Okafor. It cites the due date under section 9(b) of the sub-advisory agreement and asks for the certification and the September guideline report by Thursday, October 22. Tomás can approve and send, edit, or hold it with a reason.
The Chaser never sends a new or edited message without a person's approval, and never changes a due date.
Kaede Asset Management's Q3 guideline report is five pages in Japanese. The Reader shows the original page next to an English rendering and takes four values from it: no guideline breaches, Japanese equity weight 98.2% (minimum 90%), largest issuer Sakuragawa Seiki 4.8% (maximum 5%) and cash 1.6% (maximum 5%), each with its page. The breach answer is marked "Matches our holdings".
Figures come from the original, never from the English. The Verifier renders the page again with a second model and compares figure by figure.
Every night the Cross-check re-runs each sleeve's coded guidelines, 412 from 23 agreements with clause and page, for every business day of Q3: 412 × 64 days. Holdings come from portfolio accounting, reconciled to the custodian. Four differences: Marrow Bay and Lindenmoor unreported, Calder Moss's reported CCC breach confirmed, and Cobalt Reach's cash recorded as explained, because the agreement measures cash on a trade-date basis.
Imogen Hale, Marrow Bay's CCO, certified that "no breaches occurred". Quillfield's holdings put the international value sleeve at 27.1% emerging markets on August 14, against a 25% cap in Schedule B §2(c): three days over, $38.1M over the cap at the peak. At 6:20 a.m. the Verifier re-derives all three days from raw custodian positions with a second model, and agrees.
Verifier agent: “I agree: the difference is South Korea, 5.2% of the sleeve on August 14 […], which FTSE counts as developed and the agreement does not.”
Tomás asks in the conversation beside the exception. The Reader answers with its sources: the agreement defines an Emerging Market Country as any country in the MSCI Emerging Markets Index (Schedule B §1(f), p. 13). Korea is in it. Marrow Bay's August report says it counted by "FTSE classification" (p. 4). Their 21.9% leaves out Korea's 5.2%; with it, 27.1%.
The answer carries its sources and a confidence: 98%, with Schedule B p. 13, the MSCI list, the FTSE list and the August report.
Tomás approves the Chaser's request for explanation to Imogen Hale, copying Elena Sorensen. The reply arrives the next morning and the Reader reads it: Marrow Bay's compliance system applied FTSE country codes after a migration on August 3, the excess was sold on August 18, they remapped to MSCI on October 20 and will re-certify. The Cross-check confirms no loss: the trimmed positions realized a $0.41 million gain, kept by the fund.
“There was no loss to the Portfolio.” — Marrow Bay's reply, filed under the sub-adviser and quarter.
Tomás proposes closure with a reason code, "Breach confirmed: cured, no loss; disclosed to the board". Hannah opens the same evidence, the certification, the holdings for August 13, 14 and 17, the reply and the trade P&L, and checks and closes it: "Evidence complete; agree with the analyst." The Board report agent updates section 2(a) of the CCO report.
“Closed · two signatures on the record · the board report is updated.” No one checks their own work.
The Board report agent drafted the CCO's quarterly sub-adviser section: scope and results, material compliance matters under Rule 38a-1(a)(4), other matters, policy changes for board approval under Rule 38a-1(a)(2) and outstanding items. Before she signs, Ruth sees the checks: 41 statements, each cited to a source; every material matter with a disposition; the Verifier has checked 64 figures. She signs v7, and Marcus Bell can publish it to the board portal.
Board report agent: “I will not change a word of it; any edit now re-opens her signature.”
The same quarter, seen by four of the people who carry it — what it looked like by email and spreadsheet, and what it looks like now.
Six agents chase, read, cross-check and draft; an analyst decides, a manager checks, the CCO signs.
Plans each quarter's requests, sends them from the oversight mailbox with approved templates, reminds on day +1 and +3, escalates on day +5, reads replies, files attachments and asks for clean copies of locked or unreadable files.
Reads certifications, guideline reports, DDQs, policies and Form ADV in their own language, quotes every answer with its page, and codes each sub-advisory agreement's investment guidelines into tests with clause and page.
Re-runs every coded guideline on the firm's own holdings for every business day, with each agreement's own definitions, and compares the result with what each sub-adviser reported: investment guidelines compliance tested, not taken on trust.
Re-derives every exception and every quoted value with a second model from raw sources, with its own prompts.
Compares this year's DDQ answers with last year's and with Form ADV and regulatory filings, flags contradictions and lists sub-adviser policy changes that need board approval.
Drafts the CCO's quarterly sub-adviser section with every statement cited and every exception's disposition, and keeps it in step with the evidence.
Maker, checker, signer, publisher. The agents propose; a named person decides.
Ask about any sub-adviser, document or exception, or tell the agents what to do. Every answer cites its source, and nothing happens without your approval.
Which certifications do our holdings contradict?
Two this quarter. Marrow Bay certified no breaches; Quillfield's holdings show the sleeve at 27.1% emerging markets on August 14 against a 25% cap. Lindenmoor certified no restricted-list purchases; the blotter shows 12,400 Corvane Systems shares bought on August 27.
Why does Korea count?
The agreement defines an Emerging Market Country as any country in the MSCI Emerging Markets Index (Schedule B §1(f), p. 13). Korea is in that index. FTSE has classed Korea as developed since 2009, and Marrow Bay's August report says it counted by "FTSE classification" (p. 4). Their 21.9% leaves out Korea's 5.2%; with it, 27.1%.
Was there a loss to the fund?
No. The excess was trimmed on August 18 at a realized gain of $0.41 million, which the fund keeps. Under the oversight policy a sub-adviser reimburses losses from an active breach; gains stay with the fund, so nothing is owed.
Which sub-adviser policy changes need board approval?
Two, under Rule 38a-1(a)(2): Tessellate amended its Code of Ethics (pre-clearance now two business days), and Granite Fen amended its valuation procedures (private credit valued monthly by an independent agent). Both are in section 4 of the CCO report.
13 screens from the working solution, on its sample data. Pick one to see it large.
What counts as material, how close a match must be and how fast each exception moves are settings. Every change is a proposal, approved and versioned.
| Setting | Default | Choose from |
|---|---|---|
| Breach the sub-adviser did not report | Material | Drives section 2 of the CCO report |
| Passive breach cured within 30 days | Report as other matter | Active breaches, caused by a trade, are material |
| Cross-check tolerance | 0.05 percentage points | How far our figure may sit from the sub-adviser's before it counts as a difference |
| Classification source | The index provider each agreement names | Per sub-advisory agreement, with its clause |
| Agent confidence below which a person reads first | 90% | Set per agent in Agents and models |
| Exception SLAs | Triage 1 · explanation 5 · closure 20 business days | Each exception shows its next due date |
| Heightened oversight | After any unreported breach, for two quarters | Shown in the sub-adviser directory and file |
| Reminders and escalation | Day +1 and +3; escalation on day +5 | Escalation needs the relationship manager's approval |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (SEC OCIE risk alert, November 7, 2019 — nearly 300 investment companies examined; SEC Division of Examinations risk alert, October 26, 2021 — more than 200 funds; SEC FY2025 enforcement, via Sidley, October 2025 — a $4 million penalty for not following a fund's stated investment criteria; Rule 38a-1, 17 CFR 270.38a-1). Quillfield Capital and every sub-adviser, person, fund and issuer named on this page are fictional — characters and sample data in the working solution.
Investment manager oversight is the ongoing work of checking that the outside managers, or sub-advisers, running a fund's money follow their agreement, the fund's investment restrictions and the fund's compliance policies: collecting their certifications, guideline reports and due diligence questionnaires, testing what they say, and reporting to the board under Rule 38a-1. It is also called sub-adviser oversight, or external manager monitoring when the managers run an institution's own money. Investment Manager Oversight gives that team six agents that chase, read, re-test on the fund's own holdings and draft the CCO's section, while an analyst decides, a manager checks and the CCO signs.
The Reader codes each sub-advisory agreement's investment guidelines into tests with clause and page, and a person approves each one. Every night the Cross-check re-runs them on holdings from portfolio accounting, reconciled to the custodian, for every business day of the quarter, using the agreement's own definitions. When the certification says no breaches and the holdings say otherwise, it opens an exception and the Verifier re-derives it with a second model.
Yes. Investment manager due diligence starts from the annual DDQ: the Reader quotes each answer with its page, and the Change-watch compares this year's answers with last year's and with Form ADV and regulatory filings. In the working solution it compares 284 answers for one sub-adviser and finds a departure of the Head of European Equities that the certification left out, and it lists sub-adviser policy changes that need board approval.
The board hears about sub-advisers through the fund's Rule 38a-1 compliance program, and the Board report agent drafts the CCO's quarterly sub-adviser section from the evidence: scope and results, material compliance matters, other matters, policy changes for board approval and outstanding items, every statement cited. The CCO can sign only when every material matter has a disposition, and any edit after signing makes a new draft and re-opens her signature.
Yes. The Reader shows the original page beside an English rendering and takes every figure from the original, never from the English. The Verifier renders the page again with a second model and compares figure by figure and name by name.
No. The Chaser drafts requests and reminders from approved templates, and nothing new or edited is sent until a person approves it; escalations need the relationship manager. The agents never close an exception, never sign, never publish and never change a due date; a coded guideline changes only when a person approves it.
Yes. The analyst proposes each closure and sign-off with a reason code, the Head of Sub-Adviser Oversight checks it, the CCO signs the board report and the board liaison publishes it. Nobody can check their own work, and every decision is on a hash-chained audit trail.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your sub-advisory agreements, oversight policy, request templates and the systems that hold your holdings — and it goes live once every quality gate has passed. A guided first-time setup connects the mailbox, imports sub-advisers, loads the agreements and maps sleeves to accounts. We will walk you through it on your own sub-advisers first.
A cited yes, no or how-much for every fund, in under a minute, before the order.
1-min demoModel Portfolio RebalancingEvery model change reaches every account the same day, within each client's own rules.
1-min demoPerformance Attribution AnalysisWhy a portfolio lagged, answered the same day, each sentence tied to its attribution cell.
1-min demoWe'll run Investment Manager Oversight on a sample of your own sub-advisory agreements, certifications and holdings.