Nov 13, 2019

The problem when asset allocators don’t manage and mitigate operational risks in multi-fund portfolios

Managing operational risk in fund investments has been a topic of discussion for a number of years. In 2003, a Capco whitepaper entitled “Understanding and Mitigating Operational Risk in Hedge Fund Investments” concluded that over 50% of hedge fund failures were due to operational risk. The paper also concluded that this risk could be mitigated through the concept of “Operational Due Diligence” (ODD).