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How to get a complete funds due diligence process

Eric Dickinson, independent consultant, 15/03/2019

Fund providers’ tender teams are, more than ever before, being overburdened with requests for information and requests for proposal (RFPs). This highlights the ever-increasing need for accessible due diligence information, and for a central repository to hold fund data, enabling instant assessments on the fund and the company providing the fund.

In a recent article, the benefits of an industry standard "golden-source" data repository were discussed. These benefits include having a repository answering the questions generally raised in a due diligence process, a database enabling ease of comparison of different funds, technology doing the 'heavy lifting', and documented date and time stamped audit evidencing that fund buyers have undertaken full due diligence.

The above benefits lead to a more efficient industry, reducing costs for both fund buyers and fund providers and ultimately reducing costs for the investor.

The regulator’s desire to see better levels of understanding and hence transparency on opaque investment products is a further reminder of the need for accessible information that can be used as part of a full and thorough due diligence process.  An industry standard repository helps the market meet this need in a cost effective and efficient way.

A technology-based repository can further improve on a process, where historically the issuing of bespoke RFP documents has been the modus operandi, by offering a hub of due diligence information that can provide consistent due diligence data on funds across providers. 

Historically, due diligence has meant trawling through the small print of a lengthy prospectus, reviewing multi-page standard documentation from the fund providers, often leading to more questions than answers. A lot of time is needed on one fund to fully u...


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