How to review/select an active manager?

[TopHatFox]

Similar to the individual security/sector following, I've never had to choose an active manager or review them. This only needs to be half a page like the security/sector following, so what do you think I should put on it? Maybe the asset class they're in, the sub-asset classes they invest in, their parameters for changing their allocation, their fees, historic and expected returns, etc. - what's most important to show?

[SalutNounou]

For me the biggest criteria would be how much skin he has in the game : does he invest himself in his strategy? Or is he only managing other people's money?

[mfi]

Alpha
Correlation with your portfolio
Management team that does what they are hired/supposed to do day in and day out
Transparency

[Laura Ingalls]

What purpose would an active manager serve?

How would it be better than either indexing or buying individual stocks yourself in a discount brokerage account?

Pretty sure DH stock picking and my indexing are both beating the pants off of the investments others I know have with "their guy" charging 2% AUM. Not saying active management is wrong just ridiculous ly expensive in most cases.

[TopHatFox]

@Laura, agreed, I prefer low-cost, diversified indexing for myself, but the institution I'd like to work for almost exclusively uses active management, likely because their economy of scale allows them to nehotiate fees down significantly, their specific active returns have been significantly higher according to their annual report, and non-profit endowments also don't need to pay taxes (according to investopedia anyway).