Q4 2019

www.wealthandfinance-news.com 14 Wealth & Finance International - Q4 2019 Jun19131 Castle Hall Diligence – Due Diligence. Solved. Since 2007, Castle Hall has worked with institutional investors, fund of funds, family offices and endowments and foundations worldwide to conduct operational due diligence on their behalf. Powered by DiligenceHub, our award- winning online diligence platform, OpsDiligence allows in house diligence staff to move up the value chain. Using Castle Hall to gather core diligence data, internal staff can provide oversight, focus on exceptions, and engage with managers in higher quality discussions. Castle Hall is delighted to be named “Best Global Operational Due Diligence Firm” for the sixth consecutive year. The Due Diligence Challenge In an ever more sophisticated governance, risk and compliance environment, allocators are faced with competing challenges. • Operational due diligence falls within the broader responsibilities of governance, risk and compliance. Allocators – especially when fiduciaries – recognize the need to implement consistent, evidenced and auditable due diligence workflow across all asset classes. • Institutional allocators are also seeking to implement a tighter control environment over managers in line with best practise. This can be challenging for some private market managers. • Complex asset classes can make due diligence more difficult. Governance, risk and compliance obligations mandate more detailed due diligence. At the same time, budgets are compressed, and every dollar counts. Castle Hall is a multi-asset class expert with deep experience in complicated and illiquid asset classes. We also assist clients in review and monitoring of long only managers worldwide. The Age of Due Diligence 3.0 Castle Hall identified “Due Diligence 3.0” as a new operating model in 2014. Since then, this framework has guided the development of our firm, particularly with respect to the implementation of our DiligenceHub™ online diligence risk tool. Castle Hall’s Due Diligence 3.0 framework rests upon four pillars: • Global, multi asset class – Due diligence should be applied across all third-party asset manager relationships, not just hedge funds. • Real time monitoring, not just snapshot reports – Traditional ODD was focused on the “report” prepared at a static point in time. Looking forward, investors recognize that monitoring the evolving risks across the portfolio – daily, monthly and quarterly – is the foundation of an effective operational risk management program; • Risk-based approach – Diligence procedures should be calibrated to reflect different risk profiles and characteristics across asset classes and asset managers; and • Fintech Reporting – The days of spreadsheets and Word documents saved as a PDF are over. Investors and their service partners should aggressively leverage technology to process ever increasing amounts of information and deliver more effective and efficient risk identification, reporting and monitoring to save time and reduce risk. Due Diligence Policy & The 7 Steps to Effective Due Diligence An effective diligence policy – like a valuation policy or compliance manual – considers scope, methodology, authority, reporting lines and process, both at a point in time and over time. A Due Diligence Policy will establish the level of due diligence to be undertaken at each stage of the investment process – screen, onboard and monitor – considering the inherent risk of the asset class and fund structure; the manager specific risk; and the materiality of the investment. Castle Hall can support clients in the creation and implementation of a risk-based operational due diligence policy which reflects the specific characteristics of each client’s risk posture and their investment program. Visit www.castlehalldiligence.com/opsdiligence or Contact Us to learn more about Castle Hall’s modular and flexible due diligence solutions and the 7 Steps to Effective Due Diligence. Sign up for a free DiligenceExpress account on www.castlehalldiligence.com