Operational Due Diligence Checklists – Investor’s Beware At first glance, many investors shun the notion of utilizing checklists to facilitate the operational due diligence process. On the one hand, this distaste for attempting to boil down a complex and nuanced subject such as hedge fund operational due diligence into a series of tick the box exercises is not misplaced. On the other hand, anecdotal research suggests in other fields that utilizing checklists in complex tasks, such as surgery, can add value and increase efficiency. Are there similar efficiencies for complex tasks such as operational due diligence? Perhaps, but checklists should not be confused with notions of supplanting the entire operational due diligence process with a few well organized checklists. By design, operational due diligence processes which are driven solely by checklists and tick the box approaches will inevitably overlook key operational risks (including fraud) and will cost investors time, resources and most importantly money. Checklists are a potentially dangerous tool in investors operational due diligence toolkits and should be utilized with caution. Originally posted on the Corgentum Consulting blog at www.Corgentum.com/blog For More Information
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