Operational Risk Due Diligence: Services

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Operational Risk Due Diligence

In an era of heightened scrutiny, robust operational and risk policies and procedures are critical to attracting and keeping investors. Proper assessment of a fund's legal and operational infrastructure enhances funds' and investors' processes, potentially reducing risk of loss due to operational risks.

The Operational Risk Due Diligence practice provides investors with an independent third party assessment of their hedge fund manager's operating policies and procedures. The practice assists a wide range of investors, including pension plans, endowments, family offices and fund of funds to assess the operational risks associated with their alternative investments and provide solutions to mitigate those risks.

Duff & Phelps recently entered into a strategic alliance with WR Managed Accounts, a privately held provider of managed account and technology solutions for hedge fund investments. This partnership will enable the Operational Risk Due Diligence practice to develop unique technology-based solutions that provide transparency for hedge funds and their investors.

Operational Risk Due Diligence services include:

Reviews of fund legal documents, including the offering memorandum, memorandum and articles of the fund, subscription documents, audited financial statements, investment management and administration agreements pertaining to the fund
Onsite visits and conference calls with key fund executives (chief operating officers, chief financial officers, chief compliance officers, chief risk officers) and back office personnel, as appropriate
Review and verification of third party provider services to the investment manager and the fund
Monitoring the operations of the fund at specified intervals after the initial review
Implementation of prudent procedures to mitigate operational risks as appropriate
Background Investigations of both domestic and foreign funds and fund managers to help clients identify potential risk and make sound decisions

Learn more:

Operational Risk Due Diligence

Forensic Due Diligence

Expertise

Highlights from the 2011 5th Annual Alternative Investments Conference
The Duff & Phelps 5th Annual Alternative Investments Conference was held on November 10, 2011 at the New York Stock Exchange. The conference provided a provocative and challenging view on how the alternative asset space will evolve in the future.

“Assessing New Hedge Funds” – Alan Swersky published in Private Wealth Magazine

Alan Swersky discusses how family offices shouldn’t shy away from emerging hedge fund managers, many of whom outperform their more experienced brethren.

“Trust, But Verify - Investors, Managers Press for Fair Value Transparency” – Chris Franzek published in Alchemy

Duff & Phelps Chris Franzek published in Alchemy.

Valuation: An Operational Risk Due Diligence Perspective – Mark McMahon and Alan Swersky published in Marcum’s Private Investment Forum

Duff & Phelps Mark McMahon and Alan Swersky published in FOX Connect.

“New Fund Investment: Diligence For A New Era” – Alan Swersky and Wesley Tellie published in FOX Connect

Alan Swersky and Wesley Tellie discuss how studies show that “emerging” hedge fund managers tend to outperform their larger, more established brethren.

Sign of the Times: Operational Due Diligence Takes Center Stage

Alan Swersky and Wesley Tellie discuss the best methods for incorporating due diligence resources into organizations.

Mastering Due Diligence Brings New Investments – Doing So Is Particularly Important For New Managers

Alan Swersky discusses operational due diligence tips for new managers from which their startup funds can grow into a successful, sustainable business.

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Chris Franzek

Managing Director

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