Operational Due Diligence

Just a heads up, I’ve been reading a lot of articles in Google News lately on hedge funds and have noticed many familiar manager names popping up. There are a lot of new articles coming out saying that a manager is either a.) not doing well b.) doing well or c.) commenting on the market turmoil.

I’m guessing that people in the fund of funds industry (our clients) are also reading the media too and are more likely to know if you omitted a recent media article in a report. To combat this, I’ve started doing a Google News search on top of the standard Google search. This seems to check for the most recently published articles.

With the influx of updates, they are probably looking for just this kind of information.

What is needed to order investigations in South America? Ideally, we would like to see the individual’s full name, date of birth and National ID number. If the National ID number is unavailable, we are likely to still identify the individual with name and date of birth, but it will often delay the investigation by several days.

When ordering investigations in Japan it is very helpful to obtain the Kanji spelling (which is the Chinese characters that are used in the modern Japanese writing system) of the individual or entity’s name. This allows our investigators to search records and databases under both the English and Kanji spellings.

So maybe we could get a list going of most popular things new/old clients ask about.

I’d like to add a FAQ section to the www.checkfundmanager.com website.

You can contact a federal or county level court retriever and provide them with the case information. We can also do that on your behalf for an addtional charge. Court retrievers charge by the hour AND by the page of retrieved records. We recommend you request the case complaint and final disposition to start.

Sometimes electronic civil or criminal records in a report don’t offer up all the details necessary to make an informed decision about a manager or company. We at CFM strive to provide as much information as possible, but by all means do not think that the delivered report is the end of the line.

If curious about what your options are, by all means contact the investigator. For an additional charge, we have access to individuals who can physically visit courts and obtain copies of case documents. Seeing the story behind a piece of litigation, either through its original complaint or in its outcome, could make all the difference.

Obviously, the more information a client provides, the more CFM can find and verify. Sometimes, the identifying factors like DOB or prior address are more important and useful to the investigator than a complete resume of past employers and jobs held.

It is always best to state that dates or ages given are an approximation, if this be the case. Much time can be wasted falsely identifying a reported 42 year old manager, when in truth, the age was merely an approximation on the client’s part.

Another way to facilitate our investigation and prompt report return to the client is to provide education information whenever it is known. There is no database listing all people’s educational background, but we can verify information given.

All of this will result in a more comprehensive report and a more prompt turn-a-round time.

This seems to be a question that comes up quite often. Is a Social Securitiy Number or a Tax Id really necessary to perform a due diligence investigation? I think most would agree that while it may be helpful, initially, in positively identifying an individual, it plays little role over the course of the rest of the investigation.
Also, should an SSN not be provided, once a subject has been positively identified through the efforts of an investigator, a SSN or Tax ID can be easily obtained. Although again, it would not be essential to perform the rest of the investigation, save for a confirming possible bankruptcy records.

As more and more individuals claim backgrounds in multiple countries, how do you obtain the most meaningful information for an investigation? Is it necessary to investigate each country the subject has resided in? For example, what if you have an individual who is an American Citizen who lived and worked in France after college for 3 years and then moved to Singapore, where he/she has been for the last 10 years? Where should you start?

First of all, when dealing with this type of situation, it is very important to ascertain where the subject is living now (and if possible how long they have been there). Typically, you will discover the most information on a subject if you look at where he/she is living and working currently. Most likely, there will be professional affiliations, property records, driving records, etc. in that country (records that are established when someone is living his/her daily life in a country).

So, in this scenario, an investigation in Singapore would be the best bet. But what about the U.K. and France? Is there value in conducting investigations there as well?

If the subject has a history in the U.S. or U.K. (where we have substantial access to detailed records), we would recommend investigating the subject’s time there as well. If the subject was born in the U.S., we would be able to obtain SSN, DOB, address history and examine criminal, civil, corporate, regulatory records, etc. Also, education and employment verification could be performed.

But what about the subject’s time in France? In this scenario, the subject was right out of college and only resided in France for 3 years. There is probably little record of him/her in France if he/she did not hold a high level position at a company there. An investigation here would probably result in little information.

Each scenario is different and needs to be evaluated as such, but in this case we would recommend conducting research in Singapore and the U.S.

That being said, our strategy also depends on what the client is looking for. Do they need to be able to account for the entirety of the subject’s professional life? Are they only interested in the last 10-20 years? Many factors come into play.

Anytime you come across one of these investigations (either as investigator or client), it’s necessary and helpful to talk through the specific circumstances of the case to see what makes the most sense in terms of information that can be obtained and cost effectiveness.