Maturation of operational due diligence of outsourced IM in Australia

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The maturation of operational due diligence of outsourced investment management in Australia

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Executive Summary

Operational risk is typically defined as a failure of people, processes, and systems. There are numerous potential opportunities for an operational breakdown within an investment management company, as in any business.1

Although definitions vary slightly, the term operational due diligence (ODD), in our view, refers to an analysis of an investment manager’s operational capabilities and the ability of their infrastructure to support the execution of their investment thesis. The purpose of the analysis is to identify the levels of residual operational risk within the investment management company, with the ODD process reviewing qualitative aspects of an investment management company—such as organizational structure, personnel, governance, policies and processes, business continuity planning, and service provider monitoring.

1 APRA Insight, Issue One 2014

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Performance magazine issue 24, September 2017

Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.

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