OpsMonitor

Traditional due diligence programs allocated the vast majority of diligence effort to reviews of new managers as they were proposed for introduction to the portfolio. Due Diligence 3.0 reverses this model: the foundation of due diligence policy is now built upon effective oversight over capital already at risk with existing managers, with comprehensive due diligence completed when onboarding a new manager, or periodically refreshed in conjunction with a monitoring program.

With systematic data gathering and risk assessment, OpsMonitor allows Australian investors and intermediariesto implement – efficiently and cost effectively – a best practice governance, risk and compliance, risk-based diligence program for every external manager, irrespective of asset class.

Castle Hall’s OpsMonitor service enables Australian investors to conduct operational due diligence monitoring with respect to funds and accounts managed by third party managers located in both Australia and international jurisdictions.

Monitoring Programs Components

Monitoring is meant to be provided across an entire portfolio.  For each manager and fund included in OpsMonitor coverage, Castle Hall provides the following services.

Portfolio Initiation


On initiation of OpsMonitor coverage, Castle Hall establishes a baseline data set for each fund and manager.  This includes:

  • OpsReference – A comprehensive operational diligence data reference pack
     
  • Verifications – A series of Castle Hall’s due diligence “trust but verify” checks
     
  • Financial Statement Review – Analysis of the investment fund’s most recent annual financial statements, preparing a summary of material operational risk findings
     
  • GS 007 / Manager Due Diligence Report Review – Review of any manager supplied due diligence information such as a GS 007 report and / or a manager pays due diligence report provided by a third party vendor
     
  • ADV Filing Review – ADV-based data reference pack for each manager subject to regulation by the United States Securities and Exchange Commission
     
  • Risk Flags – Highlighting risk areas across a matrix of more than 100 proprietary risk factors
 

Ongoing OpsMonitor Program


Through the life of the OpsMonitor engagement, Castle Hall completes a series of monitoring activities providing oversite across multiple risk facets.

  • Daily
    • Media Review (Factiva) – Curated media monitoring for potential headline and reputation risks, as well as key operational developments
  • Monthly / Quarterly:
    • Manager Communications – Diligence review of manager letters and other communications for potential operational risk factors
  • Quarterly / Semi Annually: 
    • Update OpsReference – Direct outreach to the manager to update information with respect to the investment fund manager and investment fund
       
    • OpsMonitor flags – Castle Hall will highlight potential operational due diligence issues across ten key operational components
  • Annually: 
    • Verification – Due diligence verification procedures to re-verify OpsReference data
       
    • Financial Statement Review – Review of new audited financial statements as they become available
       
    • ADV Filing Review – Review annual changes to the Form ADV submissions for managers subject to regulation by the United States Securities and Exchange Commission
       
    • GS 007 / Manager Due Diligence Report Review – Annual review of any manager supplied due diligence information such as a GS 007 report and / or a manager pays due diligence report provided by a third party vendor

Integrating OpsMonitor with Comprehensive OpsReview

With OpsMonitor updating manager and fund information over time, clients are easily able to monitor risks throughout time, and execute periodic refresh onsite diligence by escalating a fund for OpsReview as part of the execution of the overall due diligence policy.  Please see OpsReview [link to OpsReview page] for more information.