BACK OFFICE HEDGE FUND ASSURANCE SERVICES
Today’s hedge fund manager is competing for institutional capital in order to maintain or build a stable and steadily growing asset base. PRISM is able to conduct mock operational due diligence audits, assist with documenting and critiquing back office procedures, and assist with developing marketing and due diligence material. Confirming your existing confidence in your firm’s infrastructure, or having the ability to correct operational gaps before business is lost, can be invaluable to an organization.
OPERATIONAL DUE DILIGENCE PLATFORM
There are over 13,000 hedge funds globally, and each fund undergoes a separate operational due diligence assessment for each investor. This is a time consuming and expensive endeavor for both the manager and each investor. PRISM provides funds with the option of undergoing one independent due diligence assessment that can be used by all of the fund’s investors. Serving as a gatekeeper, PRISM provides one comprehensive Annual Due Diligence Report that measures whether or not a fund meets today’s operational requirements. With significant experience serving institutional investors, PRISM has set its approval guidelines to match the standards of the largest and most serious global allocators.
Benefits of an Independent Hedge Fund Operational Risk Assessment
Overall, the structural assessment provides investors with ongoing due diligence at no direct cost, as the reports, like a financial audit, are available to all fund LPs. PRISM’s work meets institutional standards, and is suitable to supplement or replace in-house due diligence. Further, it enables managers to utilize the due diligence reports to develop their business infrastructure.
Who engages a consultant to get ready for ODD reviews?
PRISM’s clients who seek an independent ODD assessment of themselves are typically successful managers who already have anywhere between a few hundred million dollars to tens of billions of dollars under management, but are looking to take in larger clients or get in front of large consultants who have a position in the market to influence the fund’s capital raising. Some firms also look at such an engagement as a team building exercise or an endorsement of their infrastructure not just to clients, but to their managing partners. Fees start at $12,500 for an internal assurance report, and $25,000 per year for an assurance report that can be given to investors and service providers. Fees increase based on complexity of the investment strategy, operations, timing, location, AUM, and number of investors.