Operational Due Diligence

Operational Due Diligence is an integral component of the FQS investment process and we believe it is paramount to have a dedicated Operational Due Diligence team to conduct the in-depth due diligence prior to making an investment. Our Operational Due Diligence focuses on a fund’s legal structure, corporate governance, trading process, valuations, compliance and regulation, and has full right of veto over any investment candidate. 

Our Services

FQS has extensive expertise in conducting in-depth operational due diligence by offering a flexible and tiered Operational Due Diligence service tailored to our clients' needs:

Operational Review

  • Background checks - for those clients wishing to conduct an initial background check on the management company and/or its key individuals the background check assess any historical legal or regulatory issues in addition to assessing the firm's credit worthiness 
  • In-depth Document Review Service - all of the fund's constitutional documentation, including offering documents and audited financial statements are reviewed. Each report provides an executive summary of the key facts and primary risk factors
  • Third Party Manager Interview Service - in addition to the in-depth document review service we offer a more thorough operational analysis conducted primarily by conference call interview with the manager. Key metrics are assessed against industry best practice and a detailed report produced summarizing the operational strengths and weaknesses
  • Comprehensive Operational Due Diligence Review - our flagship service involves both the full documentation review and manager interview process, but in addition our dedicated Operational Due Diligence team conduct a full onsite review at the manager's primary office and a detailed due diligence report is produced summarizing the findings
Operational Review

In addition to the Operational Due Diligence review, FQS offers its clients and ongoing monitoring service. The monitoring service includes re-reviews of the fund's constitutional documentation, as well as updated conference all interviews with the manager and follow up onsite meetings.

Operational Due Diligence Reports

The FQS Operational Due Diligence reports include a detailed assessment of the manager and the fund in each of the following key metrics:

  1. Overview of the firm & fund(s)
  2. Fund structure & Key Terms
  3. Investment Manager & Corporate Governance
  4. Trading Process & Conflicts of Interest
  5. Valuation & NAV Procedures
  6. Cash Management
  7. Custody & Counterparty Risk
  8. Liquidity Risk & Business Continuity
  9. Compliance, Regulation & Litigation
  10. Appendix & Document Review