Key Takeaways from our webinar: The Future of Operational Due Diligence

In January, we co-hosted a webinar with Beth Gilje, formerly of the UPenn Investment Office and Founder of Union Park Consulting, a boutique consulting firm that helps investors optimize their operations. In it, she and Dynamo’s VP, LP Product Matt Keller discussed current challenges for LPs’ ODD programs and how asset owners can use technology to make them more automated, transparent, and consistent.

Today’s risk assessment processes often rely largely on 1:1 sessions with fund managers who share information with one or a few internal team members, who are then responsible for capturing and relaying the information with their broader team. Such an approach places the effort of obtaining and distributing key details on a few team members and introduces opportunities for key details to fall through the cracks. By including technology-based tools into their ODD programs, LPs can meaningfully improve the efficiency and accuracy with which data is collected and shared.

Here are the key takeaways:

1. Make your Due Diligence Data work harder

Dynamo offers several functions to help LPs, starting with the initial planning phase. With Dynamo, determining whom to meet with and when is no longer an exercise in combing through spreadsheets and historic calendar meetings; instead, users can set up a dashboard to highlight which managers are due for a meeting. Users can filter by a set frequency and asset class, and couple this with other information already stored in the RMS, such as manager changes over time that warrants discussion.

Users can also use Dynamo’s Calendar Sync to centrally organize and track manager meetings. This allows other team members to highlight points to explore in upcoming meetings, identify remote meetings to join, and be notified of post-meeting notes. This also improves historical tracking, with an easy way to view all manager or related meetings and their associated notes across your portfolio.

The Dynamo News tool uses AI technology to import headlines pertaining to user-specified entities like invested companies, prospective fund managers, and industry contacts. By incorporating automated monitoring into your operational due diligence program, you become better informed of potential investment red flags and able to identify opportunities to strengthen relationships with your managers.

2. Diligence Data Should Be Accessible Anytime, Anywhere

The days of keeping data stored in individuals’ minds and disparate emails and messages are behind us. With Dynamo, LPs have many avenues for notes and information to be instantly disseminated team-wide. Following a diligence meeting, Dynamo can automatically prompt users to enter the notes by replying to automated meeting reminder emails.

Dynamo’s Watchlist allows users to “follow” entities of interest, receiving alerts whenever new data is entered on them. Each user can configure the Watchlist to their own needs and interests, including identifying which entities to follow and which types of updates (meeting notes, documents, etc.) to receive.

3. Centralizing ODD Data is paramount

LPs take care to document their meeting notes for later analysis and decision-making. Finding information later can become cumbersome, however, especially if team members share information in disparate locations. Combing through emails, folders, spreadsheets, and chat messages to find information leaves little time to leverage it.

With Dynamo, all information, including notes, news, and meetings live in a central database so that all team members can quickly find what they’re looking for. Dynamo’s Web Forms enable LPs to automate the process of requesting, collecting, and standardizing key data points from managers. By tracking and capturing the data in a standardized manner LPs can more readily dissect the information per fund manager and across managers.

Dynamo’s peer analysis tools support apples-to-apples comparisons across multiple managers, so LPs can both understand differences and even provide managers with meaningful feedback.

With more and more processes becoming automated and streamlined, due diligence efforts should be no different. To view a recording of this webinar, please email marketing@dynamosoftware.com.