Global

Details

  • Industry: Financial Services, Investment Management
  • Type: Survey report
  • Date: 5/21/2012

The increased focus on due diligence 

The increased focus on due diligence
Investors have raised the bar in the area of due diligence in the post-crisis era. We examine managers’ opinions about this dramatic shift.

Nine out of every 10 respondents to the survey reported an increased demand in due diligence since 2008. And in keeping with the trends the survey revealed regarding transparency, the proportion was highest among the largest hedge funds, 96% of which said their investors had become more demanding in this area.


These growing trends toward increased transparency and renewed focus on due diligence are not without associated growing pains for the hedge fund industry, including growing headcounts and costly investments in infrastructure. And while the survey results indicate that the majority of industry players are taking decisive operational action to accommodate investors’ increasing demands for access and information, not all managers are equally enthusiastic about the trend, citing the significant costs and operational headaches associated with satisfying these requirements.


The increased focus on due diligence

As one manager said, “Costs have been driven upward by having to institutionalize the business, increase the number of people and improve operational efficiency, mainly with information technology and improved infrastructure.” Another commented that, “You need to have an institutional infrastructure mindset.”

 

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