Heron conducts rigorous investment and operational due diligence on every manager and fund we consider across private credit, private equity, private infrastructure, and private real estate — including non-traded BDCs, interval funds, tender offer funds, and non-traded REITs.
The managers on our platform today average over two decades of investment track record, manage multi-billion dollar asset bases, and are among the most experienced and reputable firms in their respective markets.
Our due diligence criteria below reflect our current practices and represent the factors we generally consider. They are neither exhaustive nor static — our process evolves as markets, structures, and best practices change.
Investment Due Diligence
We evaluate each manager on:
Team — In-house expertise across origination, underwriting, and risk management, tested across multiple market cycles
Track record — Consistent risk-adjusted returns with limited downside across diverse market conditions
Scale — Sufficient infrastructure and deployment history to create durable sourcing and execution advantages
Sourcing edge — Established networks with sponsors, lenders, operators, and intermediaries producing differentiated deal flow
Portfolio construction — Disciplined diversification by borrower, sector, geography, and instrument, with adaptive risk management
Operational Due Diligence
We assess the operational integrity of every manager before recommending any fund, including:
Fund administration — Independent, reputable administrators with relevant asset class experience
Accounting and audit — Recognized accounting firms conducting regular independent audits. We look for auditors with demonstrated private markets expertise, such as large national or regional firms with dedicated alternative asset practices including firms like Deloitte, EY, KPMG, and PwC among others
Valuation — Independent credentialed valuation agents for illiquid and hard-to-value assets, with clear and consistent valuation policies. We look for established valuation firms with relevant private markets expertise such as Kroll, Houlihan Lokey, and Lincoln International among others
Custody — Regulated custodians with proper asset segregation and controls
Our due diligence process and criteria are subject to change and modification at any time. No set of criteria can guarantee investment performance or eliminate risk. Investments in private market funds involve significant risks including illiquidity and potential loss of principal.