Investors Re-emphasize Compliance And Cybersecurity During Hedge Fund And Private Equity Operational Due Diligence, According To Corgentum Survey
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.
NEW YORK, Feb. 22, 2019 /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.
79% of respondents stated they are spending more time analyzing compliance and regulatory risks in funds as compared to last year. Recent key areas of focus during fund manager due diligence cited include the 2019 examination priorities announced by the United States Securities and Exchange Office of Compliance Inspections and Examinations (OCIE), Europe's General Data Protection Regulation (GDPR), and Brexit uncertainty. Additionally, respondents also indicated a 59% increase in the time spent analyzing cybersecurity related issues including the ongoing risks of phishing scams, email spoofing and social engineering attacks.
82% of those surveyed stated that significant increases in the scope, complexity and depth of ODD analysis has continued to add substantial challenges to the process over the last year. However, 79% of respondents admitted that they have not increased operational due diligence resources to sufficiently keep up with these new challenges. Similarly, only 11% of ODD analysts surveyed stated that felt they had enough time or resources to thoroughly monitor operational risks on a post-investment basis. Additionally, 68% surveyed stated that their background investigations on fund managers could be more rigorous.
"The data shows investors are being tasked with more complex operational due diligence challenges and that is straining existing resources. As the compliance and technology environments for hedge funds and private equity continue to evolve, allocators must consider how they will devote more resource toward operational due diligence to evaluate and monitor these risks going forward," 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. He is also the author of the newly released Private Equity Compliance: Analyzing Conflicts, Fees, and Risks (Wiley Finance) available on Amazon. The book serves as a complement to the author's previous book Hedge Fund Compliance: Risks, Regulation, and Management.
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
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