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Alternative Market Briefing

Castle Hall's DiligenceExchange free Transparency Reports cover 100 managers with $10tn of assets

Wednesday, July 20, 2022

Matthias Knab, Opalesque for New Managers:

Managers and investors can get free access to DiligenceExchange here: https://bit.ly/DXCInfo

Castle Hall, the Due Diligence Company, announced the formal launch of DiligenceExchange Transparency Reports. Each Transparency Report presents key due diligence data across each investment manager / GP, fund entity and the manager's related control environment. Reports are subject to anti-fraud verification checks conducted by Castle Hall - and are free of charge to both managers / GPs and investors / limited partners.

More than 100 global asset managers have already agreed to issue DXC Transparency Reports. Some of the industry's largest firms have enthusiastically adopted the platform, with launch Assets Under Transparency exceeding $10 trillion.

"Castle Hall believes due diligence is long overdue for a fintech makeover," said Chris Addy, Castle Hall's CEO. "At the moment, thousands of investors use spreadsheets or a proliferation of online survey tools to send their own unique lists of due diligence questions to asset managers and GPs. While higher value questions may be investor specific and material to an investment decision, basic data - the first 50% of due diligence - is the same for all allocators. Yet, for managers / GPs, many investors asking for the same core data, but in slightly different ways, creates enormous duplication and time burden for IR teams."

Castle Hall Founder Chris Addy is featured in the new BRIGHT MINDS video series: https://brightminds.tv/

In a recent Castle Hall survey of asset managers, 100% of firms reported that at least half of investor DDQ questions overlapped. More starkly, 60% stated that investor requests were highly duplicative, with at least two-thirds of investor questions duplicating data already requested by other allocators.

DXC Transparency Reports leverage Castle Hall's online app, DiligenceHub, to move beyond spreadsheets and survey portals to deliver industry standard due diligence reference data.

Castle Hall gathers data from each asset manager, including review of documents such as the fund audited financial statements, the offering memorandum, marketing materials and any existing DDQs.

Castle Hall does not simply accept manager supplied data: the firm conducts a range of "trust but verify" anti-fraud checks such as service provider verifications. This means that data included in each DXC Transparency Report has been externally validated.

Asset managers inform their current and potential investors that their DXC Transparency Report is available on Castle Hall's DiligenceHub platform. One engagement with Castle Hall is used to deliver diligence data to an unlimited number of investors together with counterparties, insurers, fund directors and other interested parties.

Any request to access manager / fund information is controlled by the asset manager / GP using an online control centre to manage all access permissions.

DXC Transparency Reports are available free of charge: there is no charge to the asset manager / GP to prepare their Transparency Report, and no charge for investors / LPs to access a Transparency Report. There is also no limitation on domicile or strategy: DXC Transparency Reports cover public and private market alternative strategies together with traditional long only funds and accounts.

"There is no 'alpha' in basic data gathering during the due diligence process," said Anne Coady, Castle Hall's Managing Partner. "DXC Transparency Reports will save managers / GPs tens of thousands of hours across the industry by moving away from duplicative data requests.

Then, for investors, DXC enables in-house teams to move up the diligence value chain. ODD practitioners can use DXC Transparency Reports to identify risks and rapidly target discussion items that are material to their organization's investment decision - rather than consume scarce time dealing with baseline data gathering and verification."

Castle Hall Diligence helps investors worldwide manage the operational, ESG, cyber and investment risks of asset managers. Castle Hall's core competitive advantage is DiligenceHub, the firm's proprietary online diligence platform, which has helped clients review diligence across several thousand fund entities.

Managers and investors can get free access to DiligenceExchange here:
https://bit.ly/DXCInfo

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