Operational Due Diligence
Over 20 years of experience underwriting operational risk
Overview
Before making investments across our investment strategies, we perform operational due diligence (ODD) to help identify material risks that could arise from the non-investment operations of investments and managers and seek to mitigate the impact where possible.
Key Objectives 1
Avoid losses caused by operational errors or fraud
Protect our client's reputation by identifying operational, regulatory, and legal issues
Identify the appropriate structure
Enhance the terms of the deal
Operational Due Diligence Functions
Our dedicated ODD team operates independent of our Investment Department and is comprised of Finance and Legal professionals. The ODD team performs several different reviews, the three primary being:
Background Investigation Review
Operational Capabilities and Internal Controls Review
+ Established a strong, institutional-quality internal control environment led by experienced and capable non-investment professionals
+ Designed an appropriate compliance program
+ Engaged suitable service providers
Legal Review and Structuring Review
Core Principles
Ongoing Monitoring
Our evaluation does not stop at initial investment. On an ongoing basis, we analyze and review various investment-related correspondence and monitor organizational and operational developments.
General Monitoring
Every approved investment is subject to general ongoing monitoring procedures from both an investment and operational perspective.
Specific Monitoring
Addresses specific issues identified during initial or ongoing due diligence.
ODD Watch List
Our Focus on Cybersecurity
As part of our evaluation both pre- and post-investment, we look at cybersecurity risk and preparedness. Click below to read our two-part series where we discuss some of the key prevention measures we look for and highlight best practices in readiness and mitigation.
Related News and Insights
Evaluating Cybersecurity Preparedness at Asset Managers – Part Two
Here, we discuss another component of a well-designed cybersecurity framework: readiness and mitigation –steps that help to effectively respond to a cyberattack and mitigate potential impact and/or losses.
Evaluating Cybersecurity Preparedness at Asset Managers – Part One
Here, we evaluate cybersecurity preparedness, highlighting some of the key prevention measures we look for in asset managers in today’s environment.
Effective Due Diligence in a Virtual World
We explore some challenges and unforeseen benefits of performing remote due diligence, and discuss what we believe makes a well-resourced, sophisticated investor properly positioned to conduct due diligence in this environment.
1 Due diligence seeks to mitigate but cannot eliminate risk.
Certain investments made directly, not through a third-party investment manager, may not be subject to Operational Due Diligence or require Operations Committee approval.
