ODD provides a risk assessment of the internal controls, operations, infrastructure, people and trustworthiness of a firm, and/or fund, supported by independent verification where possible. The findings of the ODD process are used to make informed decisions about whether to move forward with the investment or transaction, and to identify any areas that may require additional attention or corrective action.
For example, it aims to answer questions for Allocators, such as:
“Is this firm operationally credible and dependable?”
“Do the assets underlying my investment exist?
“Are they safeguarded from external and internal fraud?”
“Are they valued reliably and/or independently?”
This, in turn, helps to avoid losses and the reputational damage of being associated with bad actors, separate and distinct from unsatisfactory fund performance. Robust ODD helped Allocators avoid Madoff, FTX, Weavering, Theranos, Sam Israel, and Allen Stanford to name just a few.
For Allocators, the objective of ODD is to invest, and remain invested, with operational conviction. There are now more options available to Allocators to achieve this objective than ever, and they need to consider the time, cost and resources available in order to do so.
Much of the Allocator-led ODD process has always been desk-based, so the impact of travel restrictions was limited. Virtual meetings worked better than anyone could have predicted. We are seeing that on-site ODD will continue but in a more limited way, with meetings being more targeted and focused. Allocators are becoming more confident about making new allocations now they have fully adapted. We expect to see a long-term reduction in travel, not only due to Covid-19-related changes, but as a result of time and cost considerations and increasingly urgent efforts to reduce carbon footprints.
Co-Founders, Quentin Thom and James Newman, first met in 2008 when they worked in the same office complex in London’s main hedge fund area, Mayfair. Quentin was at that time a partner of ODD consultancy Amber Partners and James was Head of ODD at fund of funds Liberty Ermitage, where he vetoed a Madoff feeder fund. They immediately became friends and there was a meeting of minds in terms of shared aspirations for improving transparency, operational risk management and operational due diligence. The dialogue continued across similar career paths, which included Quentin becoming EU Head of Hedge Fund Consulting at Deutsche Bank’s Prime division within equities and James spending nine years as Global Head of ODD at Barclays Wealth Management.
perfORM finally launched in 2019, but the venture had been years in the making as the duo’s professional networks repeatedly encouraged them to launch a dedicated ODD firm addressing incumbents’ weaknesses, populating voids in the market and offering a more flexible and cost-effective delivery and business model. Find out more, here.
As a cost-effective service, we work alongside Allocators and adopt their approach, methodology and governance, as needed. We tailor our approach as required, doing as much or as little as requested by our client, with a full ODD review preferred, to avoid blind spots and better facilitate the identification of all material risks.
Technology is used to improve efficiency in the review process by streamlining the data collection process, to customise analysis by strategy, to create a repository for quantitative and qualitative data, and to augment the risk identification process. Technology works best when combined with ODD practitioner expertise and not instead of. In September 2022, we partnered with Dasseti to take our technological capabilities to the next level.
All perfORM clients sign our framework contract (T&Cs). Upon instruction, we complete a Statement of Work detailing scope and terms of ODD support. There is no subscription fee.
Our clients are global and diverse, including Investment Managers, Allocators (e.g., Family Offices / Multi-Family Offices, Private Banks, Wealth Managers, Funds of Funds, Asset Managers, Pension funds, Endowments), Service Providers / Vendors (including Virtual Asset Service Providers), and Sports Teams.
We are experienced and proficient across hedge, private equity and credit, real estate, direct lending, venture capital, digital assets (crypto), and long only. If you have a different asset class, please speak to us.
We review ESG factors and consider elements such as environmental policy, diversity and inclusion, and social practices. Where an ESG approach is described as being in place, we review policies, governance, resources and ongoing monitoring, to address the risk of greenwashing, and the reputational risk associated with this. We aim to engage with the targets of our ODD research to improve ESG practices.
We have in excess of 170 years’ financial services experience, and in excess of 90 years in ODD. Our consultants have a range of experience, both in ODD and more broadly within financial services. Our founders and senior consultants each have 15-25 years’ experience and are responsible for coaching, mentoring and developing our consultants and junior consultants, who themselves have two to ten years’ due diligence and analysis experience. We aim to provide a collegiate and collaborative working environment, working together across all asset classes, to ensure cross-training and avoid “siloing” our team members.
As one of the only UK-headquartered and practitioner-led dedicated ODD providers, we are engaged alongside, or instead of, established investment consultants and due diligence providers, due to our expertise, flexibility, availability and cost.
Yes, we include enhanced background checks, at individual and entity level, as standard in our ODD reviews. We can also provide them as a standalone service.
Yes, please contact us to discuss. A list of our ODD Report Solution clients can be found here.
We are located in the UK, Switzerland and the US.
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