NYALT Episode 104 – Operational Due Diligence: What Investors Should Know

BySarah Kuhns

Since the Financial Crisis of 2008, operational due diligence (ODD) has emerged as a critical factor in understanding the risks of an investment. It involves a comprehensive review and analysis of the operational aspects of an organization or investment opportunity. This process is essential to assess the effectiveness, efficiency, and risks associated with the operational infrastructure of the target investment. It provides investors with a thorough understanding of the operational strengths and weaknesses of the target investment, enabling informed decision-making and risk mitigation.  By following best practices and conducting a detailed analysis, investors can enhance the likelihood of achieving successful and sustainable investment outcomes.

To help us better understand this vital process, NY-ALT welcomed two of the industry’s leading practitioners and thought leaders, Michael Merrigan, CEO/Founder of Shadmoor Advisors and Michael Levien, Partner of LexPRO Research. This program was moderated by Robert Akeson, Managing Director, Riverside Management Group.

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Michael Merrigan, CEO/Founder of Shadmoor Advisors
Prior to founding Shadmoor in March 2014, Mr. Merrigan was a Managing Director at Gottex Fund Management, a fund of hedge funds with assets under management exceeding $5 billion, and a member of Gottex’s Investment Committee. As Global Head of Operational Due Diligence at Gottex, Mr. Merrigan led a team of four individuals based in the U.S., Europe, and Asia that conducted the operational due diligence on over 150 hedge funds with varying investment strategies. Prior to his four years at Gottex, Mr. Merrigan implemented the first in-house operational due diligence program at General Motors Asset Management, one of the world’s largest pension plans, with assets under management exceeding $100 billion. Mr. Merrigan has focused his career on alternative investments, working as a hedge fund analyst at HRJ Capital, a boutique firm, and at Credit Suisse. Mr. Merrigan began his career working in the operations group of GAMCO Investors. Mr. Merrigan is a 1997 graduate of Boston College.

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Michael Levien, Partner of LexPRO Research
Michael has been working as a private investigator since 1992.  During his career, he has managed numerous international cases in Europe, Asia, Latin and South America, and thousands of investigations in North America. Before co-founding LexPro Research, Michael worked for a consulting firm specializing in international intelligence gathering, crisis management, overseas business facilitation, and corporate due diligence. He also managed complex insurance claim investigations and he conducted various risk and security assessments both in the U.S. and abroad. Michael has also worked on civil litigation disputes, counterfeit merchandise investigations, shareholder proxy battles, environmental investigations, insurance fraud and corporate embezzlement cases. He has several years of experience conducting field operations such as surveillance, undertaking both discreet and traditional interviews, and researching public records. Michael has a Master of Science in Protection Management from John Jay College of Criminal Justice located in New York, New York, and a Bachelor of Arts from The George Washington University located in Washington, D.C.