Operational Due Diligence
A structured assessment by institutional investors of a fund manager’s operational risk — covering controls, service providers, key-person risk, and incident history.
Operational Due Diligence (ODD) is a parallel-track assessment institutional investors conduct alongside investment due diligence. Where investment DD assesses the strategy and performance, ODD assesses everything around it: the firm’s operational controls, third-party service providers, regulatory standing, key-person risk, business continuity, cyber posture, and incident history.
An ODD failure is often enough to disqualify a manager from a mandate even when the investment DD is strong.
ODD packs are nearly as time-expensive as DDQs and often share underlying source material. The firms that handle DDQs well typically struggle with ODD because the audience and the framing are different — the ODD reviewer cares about controls, not returns.