to proceed to the next phase of the investment process. FUNDAMENTAL ANALYSIS The heart of many traditional asset-management processes is fundamental analysis. This stage becomes even more important when assessing asset managers, whose strategic assets are the individuals managing the money and the processes they put into place. The primary forum for fundamental analysis is the on-site meeting with the manager. The purpose of the on-site meeting is manifold. The selection team seeks to observe and absorb an organization's physical setting, corporate culture, quality of personnel, and, importantly, the quality of interpersonal relations and communications. A competent manager-selection team uses several techniques to arrive at a deep understanding of these factors. First, all meetings should take place without the presence of sales or marketing personnel. These individuals-particularly the highly skilled ones-tend to redirect the conversation to highlight the manager's strengths or to "spin" or explain away its weaknesses. Speaking with individuals one-on-one allows for a more candid, less directed discussion. Additional insight comes from asking the same sets of questions to different individuals. Solid, healthy organizations tend to generate very similar answers from different individuals, whereas contrasting answers or angles often signify poor communications or political undertones. The roster of meetings is also important. Just as savvy asset-management analysts will meet with many individuals in a company (CEO, CFO, line managers, etc.), the selection team should seek to meet not only the portfolio managers and analysts, but, where applicable, the CEO, chief investment officer, director of research, operations and technology personnel, and traders. In addition, young recruits to the firm-often individuals straight out of college-tend to represent a strong leading indicator of corporate health. In a strong firm, these individuals are accomplished and motivated, and have a clear sense of their role and trajectory within the organization. At less attractive firms, new hires tend to be less qualified, shorter-term in their horizon, and less focused on broad firm-level issues. Meeting with such people-from all parts of the organization-is an important piece in the on-site mosaic. The selection team should employ several other techniques during the on-site visit. A view of the physical layout allows for inferences about communication, hierarchy, and group culture. Similar inferences can be drawn by end-of-day sessions with the entire investment team fas opposed to individuals) and by scheduling meetings that run late in the day; leaving a firm at seven o'clock in the evening affords an invaluable perspective on the work ethic of the firm. By asking the same series of questions to portfolio managers and research analysts, the selection team can assess the degree that similar investment philosophy and process has permated the entire organization. Often identification of these small nuances can be attained through an on-site visit to the organization. The goal of the on-site visit is to ensure familiarity with both the overtones and