Lessons from FTX:
The Cost of Ignoring ODD

As financial bubbles burst and markets enter periods of disruption, investors are frequently reminded of the cost of due diligence short cuts. This white paper explores some of the key due diligence issues already identified in the evolving FTX scandal.

Wirecard: Due Diligence Lessons for the Asset Management Industry

The implosion of Wirecard is one of the most stunning corporate failures in recent years. The high flying company was the prestigious symbol of corporate Germany’s pivot to fintech and a darling of the EU technology industry. In 2018 the firm joined the 30 companies in Germany’s DAX stock index with a capitalization of €25bn, with the fintech payments processing company symbolically replacing “old economy” Commerzbank. Now Wirecard has the reputation of being the only member of the DAX ever to go into liquidation.

Castle Hall has identified four themes from the Wirecard debacle which are relevant to the asset management industry. As investors conduct due diligence, be it on hedge funds, private equity, real estate, infrastructure or long only funds, Wirecard provides valuable insights which can be applied to our own industry.

Responsible Investment Manager

Responsible Investment Strategy

Global issues such as climate change, resource scarcity, income inequality, diversity and corruption have led many businesses to fundamentally change their corporate strategy.

The financial services and asset management industries are also impacted by this fundamentally different business environment. On the buy side, leading investors now consider Environmental, Social and Governance (“ESG”) factors on many levels. Investors may measure and set specific targets to reduce the carbon footprint of their overall portfolios, or may engage with portfolio companies to improve their behavior and disclosure of ESG data.

Trust but Verify

Operational Due Diligence
from an Allocators View Point

Castle Hall was delighted to contribute to AIMA Australia’s Investor Advisory Group’s “Trust but Verify” operational due diligence roundtable.  The roundtable covers many aspects that are consistent to asset owners globally, with views from leading Australian Super Funds as well as the Consultant’s perspective from Castle Hall and Willis Towers Watson.  

Due Diligence 3.0

Responding to a Regulated and
Institutional Alternative Asset Industry

ODD, often an optional luxury before 2008, has become a mandatory component of alternative asset investing and is the tool deployed by investors to ensure that alternative investment managers meet ever evolving and more demanding requirements.

Download the Due Diligence 3.0 white paper and discover how investors can enhance their ODD programs.

Creating a Best Practice Due Diligence Policy

Protecting an investing organization:
building an effective due diligence framework

For professional investors, Operational Due Diligence (“ODD”) has become an increasingly important element of their process to allocate capital to third party asset managers. 

Internal and external stakeholders now see a DD Policy as best practice to establish a consistent, evidenced and auditable diligence process across all external manager relationships. When drafted effectively, a policy document guides daily activities, and equally provides a longer-term, strategic framework to oversee the inherent risks of a third-party manager program. Indeed, some global regulators have begun to identify ODD policies as a regulatory issue for prudentially regulated entities.

Evaluating an Asset Manager’s Cybersecurity Environment – A guide for the Operational Due Diligence practitioner.

Cybersecurity has become a top operational due diligence priority. This white paper, supported by a webinar, provides practical guidance to help investors evaluate an investment manager’s cybersecurity environment. What are the questions to ask, and how should an investor rate a manager’s responses?

This paper seeks to bridge the gap between what can quickly become extremely technical subject matter, and more practical guidance as to how to approach cybersecurity during a real world operational diligence review.

Redefining Corporate Governance –
Second Edition

Castle Hall Diligence is pleased to present a revised and updated second edition of Redefining Corporate Governance. In the context of a more sophisticated, institutional ODD agenda, investors continue to seek guidance as to implementation of a best practice operational due diligence program. This white paper sets out six criteria – “The 6 C’s of Governance” – which provide a framework for governance best practices.