Partnership supports an enhanced due diligence workflow at each stage of the operational due diligence process.
Castle Hall Alternatives and Exiger announced a business partnership to deliver next generation due diligence services to investors worldwide, leveraging the fintech expertise of both companies. The combination of Exiger’s DDIQ online investigative platform and background investigation team, together with Castle Hall’s award winning operational due diligence, creates a new standard of diligence capability.
“Our combined services provide innovative, effective solutions to support investors’ workflow at each stage of the operational due diligence process” said Arun Banerjee, Managing Director at Exiger New York. “Whether screening potential managers, onboarding new funds, or monitoring the existing portfolio of external manager relationships, Exiger and Castle Hall offer new and enhanced, tech-enabled diligence solutions.”
At the screening stage of the investor diligence workflow, Exiger offers DDIQ to provide investors with an efficient, automated due diligence research process that delivers consistent, accurate and auditable results. In minutes, investors can order DDIQ reports on a potential investment manager and key executives, and immediately identify issues which could impact whether to proceed further with manager evaluation. DDIQ’s ability to understand and process natural language, while leveraging the power of machine learning, allows it to employ the same cognitive processes as a due diligence researcher without the constraints of human-based research.
Once an investor is comfortable with the investment potential of a new manager and is ready to onboard, detailed background investigations become critical. At the onboarding stage, Exiger and Castle Hall have combined the traditional background check with “trust but verify” ODD procedures to create an innovative new due diligence tool – OpsVerification.
“The starting point of each OpsVerification report is a detailed Exiger Diligence background investigation on the management company and key management company professionals” said Banerjee. Exiger Diligence utilizes a vast array of advanced technology and global resources, including thousands of public record sources, specialty subscription databases, subject matter experts, seasoned investigators and researchers to prepare valuable reports for potential investors, financial institutions and/or legal counsel. Exiger Diligence profiles are completed with industry-leading turnaround time and accuracy.
Concurrent with the Exiger investigation process, Castle Hall sends diligence questionnaires to the management company and reviews fund and manager documents. Castle Hall then completes extensive “trust but verify” procedures, including verification of service provider relationships, fund assets under management, and validation that stated performance ties to the audited track record. Castle Hall also identifies more than 100 risk factors during the OpsVerification process, highlighting risks such as declining assets under management, a high fund expense ratio, or absence of documentation such as a compliance manual or written cyber security policy. In combination, the traditional “background check” becomes a comprehensive due diligence report, with the ‘verification check’ process providing a new level of anti-fraud protection for investors.
At the monitoring stage, Castle Hall’s OpsMonitor service already covers more than 500 fund entities, providing investors with financial statement analysis, form ADV review and media monitoring. OpsMonitor is now enriched with Exiger ongoing background investigations. “OpsMonitor delivers an extensive due diligence monitoring solution to institutional investors, leveraging Castle Hall’s award-winning DueDiligenceProfessional technology platform” said Chris Addy, Castle Hall’s President and CEO. “However, when monitoring managers, our team have always been uncomfortable with the traditional background check process – there is a blatant risk gap if investors only run a background check before they invest. What happens if a manager has a background issue after investment?”
Exiger’s technology enabled diligence approach has allowed Castle Hall to close this coverage gap. Background investigations can now be updated with real time database, media and internet monitoring using DDIQ, supported by periodic updates to manual research, including criminal checks in jurisdictions – such as New York State – where an automated database solution is cost prohibitive. DDIQ is also differentiated by its global coverage, accessing information from more than 50 countries.
“Both Exiger and Castle Hall are tremendously excited by the potential of our partnership” said Banerjee. “Operational Due Diligence is not ‘business as usual’. As investors extend ODD procedures across their full portfolios, incorporating private equity, real estate and long only asset managers, consistent, auditable diligence workflow is critical. Exiger and Castle Hall offer, in combination, a New Standard to support investors’ governance, risk and compliance needs when managing their due diligence programs.”
Exiger is a global compliance, investigations and technology company. Exiger arms financial institutions, multinational corporations and governmental agencies with the practical advice and technology solutions they need to prevent compliance breaches, respond to risk, remediate major issues and monitor ongoing business activities. Exiger works with clients worldwide to assist them in effectively managing their critical challenges while developing and implementing the policies, procedures and programs needed to create a sustainable compliance environment. A global authority on regulatory compliance, the company also oversees some of the world’s most complex court-appointed and voluntary monitorships in the private and public sectors, including the monitorship of HSBC. Exiger works with clients worldwide through its offices in New York City, Silver Spring (DC Metro), London, Hong Kong, Toronto and Singapore.
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