Investors Shift Focus to Social Media Analysis During Hedge Fund and Private Equity Background Investigations, According to Corgentum Survey

Actualizado el 13 de agosto, 2019 - 16.00hs.

Investors Shift Focus to Social Media Analysis During Hedge Fund and Private Equity Background Investigations, According to Corgentum Survey

Diminishing returns cited for increased investor analysis of fund regulatory filings

PR Newswire

NEW YORK, Aug. 13, 2019 /PRNewswire/ -- Corgentum Consulting, a leading provider of operational due diligence reviews and background investigations, announced today the results of a new investor and operational due diligence (ODD) analyst survey.

62% of respondents stated that within the past year they have begun to search social media platforms such as Facebook, LinkedIn, Twitter and Instagram as part of the pre-investment background investigation process. Searches were on both the social media activities of the fund management company and individual employees. 38% stated that they have uncovered at least one negative item during social media searches that was omitted from more traditional investigations. Additionally, 73% of respondents stated that would benefit from increasing the ongoing monitoring of fund managers social media on a post-investment basis.

Investors also felt that increased analysis of more traditional background investigation areas such as regulatory filings are increasingly producing diminishing marginal returns. While 84% of investors stated they would like to be notified when a fund manager revises a filing such as the Securities and Exchange Form ADV, citing the sanitized nature of these filings, only 13% said that the information in these updates were useful in making an initial or ongoing risk assessment. As a result, 48% stated they found more benefit in increasing the scope of litigation and criminal searches instead.

"Investors increasingly want background investigations that dive deeper into the digital profiles of fund managers and their personnel. The focus is now on building a complete online and offline picture of the potential reputational risks involved with an investment. As a result, investors are increasingly integrating investigations into their larger due diligence and risk management frameworks." said Jason Scharfman, Managing Partner of Corgentum Consulting.

The survey was conducted as part of the Corgentum webinar series hosted by Jason Scharfman, a leading expert in operational due diligence and compliance for hedge funds and private equity. He is also the author of the newly released Private Equity Compliance: Analyzing Conflicts, Fees, and Risks (Wiley Finance) available on Amazon. The book serves as a complement to the author's previous book Hedge Fund Compliance: Risks, Regulation, and Management.

The survey results were first presented exclusively to premium subscribers of Corgentum's monthly newsletter, Due Diligence News. To learn more about investor operational due diligence signup for Corgentum's research and newsletter at Corgentum.com/contact and follow @Corgentum on Twitter.

About Corgentum Consulting

Corgentum Consulting is a specialist consulting firm for investors, that performs operational due diligence reviews and background investigations on fund managers. The firm's work covers all strategies globally including hedge funds, private equity, venture capital, real estate funds, and traditional funds. Corgentum's clients include investors such as fund of funds, pensions, endowments, foundations, investment consultants, banks, institutional investors and family offices. For more information visit www.Corgentum.com

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