Ken Brown shows in http://www.math.cornell.edu/~kbrown/scan/1975.0050.pdf that group cohomology for a group G commutes with direct limits iff G is of type $FP_\infty$. That is the trivial module $\mathbb Z$ has a projective $\mathbb ZG$ resolution which is finitely generated in each degree.

Ken Brown shows in

• Homological criteria for finiteness, Comment. Math. Helv. 50 (1975), 129–135, doi:10.1007/BF02565740, (free author version)

that group cohomology for a group G commutes with direct limits iff G is of type $FP_\infty$. That is the trivial module $\mathbb Z$ has a projective $\mathbb ZG$ resolution which is finitely generated in each degree.