Investment Mandate
An investment mandate is the formal or informal set of constraints defining what an allocator or fund is permitted to invest in.
Allocator relevance: The primary fit gate—mandate mismatch wastes time and harms credibility.
Expanded Definition
Mandates include asset class scope, geography, sector constraints, liquidity requirements, ticket size ranges, risk limits, and policy restrictions (e.g., ESG exclusions, ERISA considerations for some investors). In institutions, mandates are often documented in IPS and committee charters. In family offices, mandates can be less formal and more behavior-driven but still real.
The best mandate data separates confirmed constraints from inferred patterns and ties them to evidence and recency.
How It Works in Practice
Mandates guide target list building, diligence prioritization, and routing decisions. They also shape pacing, portfolio construction, and rebalancing behavior over time.
Decision Authority and Governance
Mandates are set by governance bodies (board/IC/principal). Changes in governance or leadership are often the best leading indicators of mandate shifts.
Common Misconceptions
- Mandate equals “investment preferences” only.
- Mandates don’t change.
- Mandates are always public.
Key Takeaways
- Mandate is a constraints framework, not a marketing statement.
- Recency and evidence protect against misclassification.
- Governance shifts frequently precede mandate changes.