Due Diligence Matters - September 2025
perfORM is an award-winning, international (UK, Switzerland, USA and UAE) and standalone Operational Due Diligence solutions provider with 150+ years of collective ODD experience. Over 300 operational due diligence reviews have been completed since the start of 2023.
Our Co-Founder and Co-Head, Quentin Thom, will be Geneva and Zurich later this month – please contact us should a meeting be timely and useful.
The ‘ORM’ in perfORM stands for Operational Risk Mitigation. Please contact us if you would like to discuss our services, or to receive sample ODD Reports, thank you.
Cash Controls – ODD Best Practice
As regards cash controls, best practice is for these to be executed under dual control with a third party, i.e. the administrator, such that neither one of the investment manager or the administrator can move cash out of the fund without the involvement of the other. Typically, this will involve the administrator initiating the wire on the banking system and appropriate (i.e., finance/operations) staff from the manager releasing the wire. Within each of these functions there should be a maker/checker process (at least two individuals at each of the administrator and the manager required to be involved in the process, both from the finance/operations team in the case of the manager).
Administrator involvement is even more important for a manager with a small finance/operations team, where a maker/checker process comprising only finance/operations employees may not be possible at the manager level and a member of the investment team, e.g. the CIO/founder may be involved in the process as a result. In this scenario we may see the CFO/COO instructing the administrator to make a payment, the administrator performing the appropriate checks and initiating the wire under a four eyes process, and the CIO/founder releasing the payment. This is not best practice but for small firms may be unavoidable.
Occasionally, we see firms handing the entire process over to the administrator. While the desire to demonstrate a fully independent process makes sense, administrators are not infallible, and we prefer to see involvement from the manager’s operations/finance function.
In some instances, we see a manager’s finance or treasury team being fully responsible for cash wires. This is sometimes the case for closed-ended funds, where the administrator is performing more of an administrative function, rather than an independent oversight function, as for an open-ended fund. While the controls in place within the finance or treasury team may appear robust, in the absence of the involvement of a third party, it is impossible to verify them.
If a third party is not involved in the process but a member of the investment team is, the risk of collusion or coercion is increased. Equally, having only one individual at the manager responsible for cash payments, regardless of who it is, is very high risk.
In all instances where an administrator is involved it is important to ascertain the exact nature of the controls it applies. I recently performed a review where the administrator was responsible for releasing payments, but did not perform any checks on the payees, merely actioning the manager’s instruction. We expect administrators to check that payments out of the fund are in line with the fund’s PPM, that the appropriate staff at the manager have instructed the payment and that the payee is legitimate. Where the payee’s account details have changed, we expect the administrator to verify that the new account details are legitimate.
Client Spotlight
In this month’s e-bulletin we spotlight one of our Investment Manager ODD Report Solution clients, GrandLine Investment Management Ltd (”Grandline”).
GrandLine, founded in 2018, is a systematic multi-strategy trading company that deploys market-neutral quantitative strategies on major digital assets. The Firm is the investment manager to the GrandLine Technologies Digital Alpha Master Fund, a Cayman Islands domiciled vehicle.
Late last year, Grandline pro-actively opted for our collaborative and progressive ODD Report Solution culminating in an Investment Manager and Fund level ODD Report. Our (March 2025 dated) ODD Report is available to Grandlne’s chosen clients and prospects (free of charge and via secure download from our technology portal), significantly reducing the amount of time spent managing inbound operational due diligence requests. Our 40+ page ODD Report reflects a full scope review process, in terms of format, depth and verifications and includes (entity and individual level) background checks.
ODD Report Solution
Our ODD Report Solution is not just another tick in a box, it is a fast growing and innovative approach to operational due diligence. A pragmatic solution for Investment Managers and Service Providers which engage us to complete an ODD review.
“We believe in operational excellence, doing things ‘the right way’ and holding ourselves accountable for delivering institutional-grade asset management. Working with perfORM to review our processes thoroughly is key to ensuring our investors have independent insight, understanding, and confidence in how we manage their assets. We appreciate the perfORM team’s forensic review of our documentation and processes and look forward to collaborating again” – Investment Manager ODD Report Solution client
Investment Manager: Redhedge Asset Management, LLP – please contact here to request access to our July 2025 dated ODD Report.
Investment Manager: Hyperion Decimus, LLC – please contact here to request access to our June 2025 dated ODD Report.
Investment Manager: MNNC Advisors (Cayman) SEZC – please contact here to request access to our June 2025 dated ODD Report.
Investment Manager: GrandLine Investment Management Ltd – please contact here to request access to our March 2025 dated ODD Report
Investment Manager: Spectra Capital, LLC – please contact here to request access to our March 2025 dated ODD Report
Investment Manager: Gemcorp Capital Management Limited – please contact here to request access to our January and March 2025 dated ODD Reports
Investment Manager: Hivemind Capital Partners UK LLP – please contact here to request access to our January and April 2025 dated ODD Reports
Investment Manager: MARK Capital Management LP – please contact here to request access to our December 2024 dated ODD Report
Investment Manager: 24 Capital Management Ltd – please contact here to request access to our December 2024 dated ODD Report
Investment Manager: Edge Capital Investment Management, LLC – please contact here to request access to our September 2024 dated ODD Report. UNDERGOING ANNUAL RENEWAL PROCESS
Investment Manager: Fasanara Capital Limited – please contact here to request access to our July 2024 dated ODD Report
Investment Manager: Eltican Asset Management SAS – please contact here to request access to our July 2024 dated ODD Report
Digital Asset Service Provider: Copper Technologies (Switzerland) AG – please contact here to request access to our April 2024 dated ODD Report. UNDERGOING ANNUAL RENEWAL PROCESS
Investment Manager: Coral Cove Capital Ltd – please contact here to request access to our January 2024 dated ODD Report
Investment Manager: Wincent Capital Management Limited – please contact here to request access to our September 2023 dated ODD Report. UNDERGOING ANNUAL RENEWAL PROCESS