Operational Due Diligence

NEPC’s Operational Due Diligence (ODD) team seeks to identify and mitigate operational risk factors that may impact the future performance of an investment manager. The ODD team actively reviews all new hedge fund managers before their strategies are added to NEPC’s platform and monitors all previously approved managers through periodic revisits and an annual ODD survey.

The ODD team is independent from other research teams and holds veto power to reject any fund. While it specializes in reviewing hedge fund strategies, the ODD team also acts as a resource to other research groups and to clients for special projects upon request.

Our process for prospective funds:

  • Exhaustive review of key documents of the firm and fund
  • Thorough onsite meeting with the heads of back-office functions
  • Discussion with key service providers
  • Background checks as needed

Process for continuous monitoring of approved funds:

  • Annual ODD survey with client reports being made available upon request
  • Annual financial statement reviews
  • Periodic revisits to investment managers

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