COVID Pandemic To Have A Lasting Effect On Investor Hedge Fund And Private Equity Due Diligence - Even With Vaccine, According To Corgentum Survey
Investors seek to balance remote due diligence efforts against increased operational risks
Dec 22, 2020, 13:00 ET
NEW YORK, Dec. 22, 2020 /PRNewswire/ -- Corgentum Consulting, a leading provider of operational due diligence reviews and background investigations, announced today the results of a new investor and operational due diligence (ODD) analyst survey.
Although the bulk of allocators surveyed stated optimism about a Coronavirus vaccine, 84% indicated that in 2021 they anticipated continuing to perform almost exclusively off-site remote due diligence. The remaining 16% stated that the in-person meetings they plan to perform are locally focused.
In regards to the longer term outlook for alternative investment due diligence, 72% of investors stated that re-evaluating their compliance and due diligence policies to allow greater flexibility for off-site fund manager due diligence. The top three reasons for this were travel cost savings, increased scheduling flexibility, and the ability to conduct more frequent, shorter due diligence reviews.
Respondents acknowledged that with the trend towards remote due diligence also comes a series of new challenges. 74% of investors stated the biggest risks they face are ensuring receipt of sufficient data access and transparency virtually. With the shift to remote work environments investors also faced challenges evaluating the robustness of fund manager cybersecurity and determining whether fund service providers have stepped up to meet new virtual operational challenges.
"While onsite due diligence meetings produce more complete pictures of an asset managers operations, Corgentum's survey results show that many investors have now become increasingly accustomed to remote due diligence. While off-site due diligence can serve to bridge a gap in between onsite meetings it should not be viewed as a replacement to the more detailed analysis that typically happens with a manager in their offices," said Jason Scharfman, Managing Partner of Corgentum Consulting.
The survey was conducted as part of the Corgentum webinar series hosted by Jason Scharfman, a leading expert in operational due diligence and compliance for hedge funds and private equity. Mr. Scharfman is also the author of the newly released Alternative Investment Operations: Hedge Funds, Private Equity and Fund of Funds (Palgrave Macmillan). He is also the author of Private Equity Compliance: Analyzing Conflicts, Fees, and Risks (Wiley Finance).
The survey results were first presented exclusively to premium subscribers of Corgentum's monthly newsletter, Due Diligence News. To learn more about investor operational due diligence signup for Corgentum's research and newsletter at Corgentum.com/contact and follow @Corgentum on Twitter.
About Corgentum Consulting
Corgentum Consulting is a specialist consulting firm for investors, that performs operational due diligence reviews and background investigations on fund managers. The firm's work covers all strategies globally including hedge funds, private equity, real estate funds, and traditional funds. Corgentum's clients include investors such as fund of funds, pensions, endowments, foundations, investment consultants, banks, institutional investors and family offices. For more information visit www.Corgentum.com
SOURCE Corgentum Consulting
