60 Seconds With Nik Downham

Q: What’s your role at perfORM?

I am a Senior ODD Consultant (CFA qualified) based in Geneva, Switzerland. I manage a team of two ODD analysts and am primarily focused on delivery of client engagements, but I also get involved in areas including our technology agenda. Further, I help the co-founders with running perfORM and business development. 

Q: When did you become an ODD’er?

I had my first proper taste of ODD at Fitch Ratings in 2008 as the global financial crisis was in full swing. Here, we rated credit asset managers (mainly CLOs) on the basis of their operational capabilities. It was an interesting introduction during an extremely challenging time for the industry.  

Q: Why did you join perfORM?

It was an opportunity to join a fast growing and positively disruptive ODD provider with some of the best minds in the field.  Additionally, perfORM was building a strong franchise in the digital assets space, which is something I wanted to learn.  Furthermore, when compared to an internal ODD role, it frees me to be more involved in a broad range of ODD services and solutions.  

Q: What do you think makes a good ODD’er?

Someone who is:

• Intellectually curious, continually learning and is comfortable understanding a range of specialist areas relevant to an ODD review, ranging from investment processes (across many asset classes) to cyber risk management.
• Able to identify the potential ‘non-investment’ risks, and able to distinguish between what is important and less important. 
• A good communicator, both written and verbally.  The role requires you to be able to interview and challenge senior management during multi-hour meetings, write informative reports and explain the risks in a clear and easy to understand manner to clients. 

Q: Why do you think perfORM is different and who does it compete against?

I think one of our key differentiators is our flexibility.  For example, we do not lock clients into a retainer (or subscription / platform fee): they are able to use us as and when there is need on their side.  Also, we are flexible in the way that clients can use us. For example, some clients use perfORM as additional team members that can seamlessly slot into the client’s way of working and their internal systems. Other clients will defer to perfORM’s full scope offering, where we run the entire ODD process with minimal client involvement and provide a proprietary report.   

Q: How does perfORM use technology?

We partnered with Dasseti and use a separately hosted version of their online system.  We use this now for sending DDQs to managers, which is an improvement from the days of sending Word files. We have also customised the system to assist in the creation of a report draft with basic DDQ information, which has reduced manual workload for analysts and gives more time for writing and analysis.  We can provide clients with their own dedicated ‘mini portal’ to access data and information relating to their reviews.  

Q: What does AI mean to ODD?

Like most other knowledge-based professions, AI has the potential to make a large impact in the world of ODD. However, caution is necessary and there are numerous well documented risks such as the tendency of LLMs to hallucinate facts or issues with data confidentiality. On the Investment Manager side, we note AI is starting to be used to streamline the managers’ RFP processes which makes sense, but for ODD’ers it is important to validate information received that may be AI generated, for example in the meetings with senior management. Zooming out a bit, AI is being used by Investment Managers in numerous areas ranging from investment research/decision making (e.g. systematic managers) to vendor-supplied cybersecurity solutions. This will continue to grow, and ODD professionals will need to understand and be conversant in AI, the evolving regulatory landscape, and the potential risks. We have just seen the first SEC action against two advisers who made false and misleading claims in filings about the use of AI in their investment processes.  

Q: What do you do to unwind?

Living in Geneva means experiencing the outdoors.  In the winter this normally involves the nearby mountains and trying (unsuccessfully) to keep up with my daughter on skis, in the summer this may involve enjoying time by the lake.  I am also a bit of a nerd and am often trying to learn new things or attempting to get better at coding.