What an investor's operational due diligence will test in your finance function

Institutional investors rarely stop at the track record. Their operational due-diligence teams test whether the manager's finance function would catch an error before investors do. They look for evidence, not intentions.

What they usually test

• NAV oversight. How the manager reviews the administrator's NAV, rather than simply receiving it, and what is escalated.
• Cash controls. Who can instruct payments, who approves them, and whether those are different people.
• Fee and waterfall calculations. Management and performance fees, hurdle and catch-up, recalculated independently of the administrator.
• Provider oversight. Service levels, periodic reviews and an error log for the administrator, depositary and auditor.
• The manager's own finances. Accounts, tax, cash planning and, where it applies, regulatory capital.

What to have ready

A documented finance operating model with owners. Evidence that reviews happened: sign-offs, not just policies. An issue log with owners and deadlines. Board papers that show finance was discussed, not only noted.

A first or second fund can reach this without a full-time CFO. Fund Finance Oversight and Governance & Board Finance are built for that moment. THOTH does not provide investment or fund management; regulated activities remain with the authorised firm.