Cybersecurity also featuring more prominently in due diligence
There’s growing concern among investors about compliance and cybersecurity in the fund managers the entrust with their investments.
The poll of new investor and operational due diligence (ODD) analysts by Corgentum Consulting found that 79% of respondents are spending more time analyzing compliance and regulatory risks in funds compared to last year.
As regulators tighten their grip on investment funds, new challenges are emerging but the poll reveals that investors do not necessarily have the resources to keep up; 79% of respondents admitted that they have not increased operational due diligence resources sufficiently and 68% surveyed stated that their background investigations on fund managers could be more rigorous.
"The data shows investors are being tasked with more complex operational due diligence challenges and that is straining existing resources. As the compliance and technology environments for hedge funds and private equity continue to evolve, allocators must consider how they will devote more resource toward operational due diligence to evaluate and monitor these risks going forward," said Jason Scharfman, Managing Partner of Corgentum Consulting.
Cyber risk
As well as compliance, respondents also noted an increased focus on cybersecurity with a 59% increase in the time spent analyzing cybersecurity related issues including the ongoing risks of phishing scams, email spoofing and social engineering attacks.
Investors re-emphasize #compliance and #cybersecurity during #HedgeFund and #PrivateEquity operational #DueDiligence new @Corgentum #survey shows #SEC #GDPR #Brexit https://t.co/YJbke1ZnWV
— Corgentum Consulting (@Corgentum) February 22, 2019
