Alternative Investment Awards 2017

www.wealthandfinance-intl.com 9 AI170020 Castle Hall Alternatives, the Due Diligence Company, is a leading specialist in operational and investment risk due diligence of alternative and traditional asset managers. We profile the firm to find out more about the range of services it offers. Castle Hall Alternatives supports global institutional investors, fund of funds, advisors, family offices, foundations and endowments to identify and manage the business, operational, cyber and investment risks of asset managers. With a team of 50 professionals, Castle Hall deploys one of the industry’s largest and most experienced due diligence teams. Castle Hall’s core competitive advantage is DueDiligenceProfessional™, the firm’s proprietary online diligence platform, which has helped clients review diligence across several thousand fund entities. Now in its 11th year, Castle Hall Alternatives is proud to have been named the Best Global Operational Due Diligence Firm for four con- secutive years, and to have the DueDiligenceProfessional™platform recognized as the Best Alternative Investment Diligence Platform for the second consecutive year. Institutional allocators, private investors, intermediaries and other finan- cial industry participants, are becoming more focused on best practice in Governance, Risk and Compliance oversite and responsibilities to manage overall portfolio risk on an ongoing basis. Historically, investment performance, return drivers and risk premia have been closely evaluated pre-investment, and monitored post-in- vestment, to ensure investment objectives are met and investment risk is understood and controlled. As a focus on risk management and oversite expands, allocators and intermediaries now see the need and benefits to evaluating the operational risks across all third-party asset managers, pre-investment, and monitoring the changing operational risk environment at each manager post-investment, in the same manner as investment risks are evaluated and monitored across a portfolio. The challenge is to establish a sensible diligence and oversite policy, and to then execute that policy in an efficient and cost-effective manner. Against this backdrop, Castle Hall sees the emergence of a new para- digm in ODD, which they call Due Diligence 3.0. Due Diligence 1.0: Pre Madoff. Before 2008, operational due diligence was an optional, “nice to have”. For those investors who did conduct ODD, the process, scope and methodology of emerging ODD programs was very variable. Equally, there was a lack of commonality among hedge fund operating struc- tures, exemplified by the existence of many self-administered funds. Due Diligence 2.0: Post 2008. In the Diligence 2.0 world, some level of hedge fund operational due diligence is now performed by virtually all asset owners. Diligence scope and methodology has also become somewhat more standardized, although some investors continue to have a “light touch”. Due Diligence 3.0 is a new model: Responding to the ever more so- phisticated Governance, Risk and Compliance environment, ODD Policy must now address four emerging themes and challenges for institutional and private investors. The first of these is the multiple asset classes that clients operate in. Operational diligence should be applied across all third party asset manager relationships, not just hedge funds. Investors focused on governance, risk and compliance now require consistent operational risk information across all fund and account holdings, irrespective of asset class. Secondly, a risk based approach is vital. Operational risks for mutual funds, long only managed accounts, private equity funds and real estate investments are very different as compared to a traditional hedge fund. Different diligence procedures should be adopted to reflect different asset classes. Additionally, traditional ODD has focused on a schedule of in person diligence meetings, with the output of each ODD cycle often limited to a report memorializing information gathered during each meeting. This process is then repeated every 1-3 years. Diligence 3.0 introduces a new operating model: the foundation of an effective ODD program is now an active, real time monitoring program, where the annual onsite visit and resulting diligence report is just one tool in a far broader tool- box of diligence procedures. Finally, the exploration of new fintech is vital to operational due dili- gence. Just as hedge fund managers no longer use Excel for account- ing, ODD no longer relies on word processed meeting reports. Technol- ogy has become critical to process ever increasing amounts of public and private information. Systems, bandwidth to curate data, and quality reporting and dashboard capabilities are vital to give asset owners an effective view of portfolio risks. Implementing aspects of all these vital areas, DueDiligenceProfession- al™, Castle Hall’s proprietary online diligence solution, is a risk-manage- ment platform for operational due diligence. The guiding principle of DueDiligenceProfessional™ is flexibility. Providing a powerful set of dil- igence tools, DueDiligenceProfessional™ allows investors to outsource their diligence program in full, co-source a program with Castle Hall in combination with internal diligence, risk and compliance professionals, or simply use Castle Hall’s services on an “as needed” basis. DueDiligenceProfessional™ tools can be applied to any fund or invest- ment vehicle, and across all asset classes, from hedge funds to private equity to real estate and long only mandates. Overall, 2016 was a year of tremendous growth and accomplishment for Castle Hall. In addition to rolling out a series of enhancements to the DueDiligenceProfessional™ platform, Castle Hall achieved several significant milestones, including the opening of offices in Abu Dhabi and Sydney, integrating SwissAnalytics into Castle Hall’s operations, and expanding our services to include standalone Financial Statement and Form ADV review options. Moving forward, the firm expects to continue to grow its team and evolve its capacity and service offerings to meet the needs of institu- tional and private allocators globally. In addition, Castle Hall is keen to announce a series of important partnerships this year. These are indeed, exciting times for Castle Hall Alternatives. The firm is grateful to its clients for partnering with Castle Hall to meet their specific operation- al due diligence and monitoring needs, and the Alternative Investment Awards for their recognition of the company’s work. Best Global Operational Due Diligence Firm 2017 & Best Alternative Investment Diligence Platform: DueDiligenceProfessional