Operational Due Diligence Exposure

So I have been looking into operational due diligence as it seems like it would be an interesting role and help in gaining quick and deep exposure to various companies and industries (no opportunities seem have come up in my area as of yet). I was wondering if anyone has had experience with these types of groups, what the work is like and what the some typical exit opportunities are out of such a position. Corporate development or PE has always interesting to me, would this be a less relevant experience than other forms of due diligence?

 

Thanks I have actually gone through this post and others and there just seems to be very little info floating around. The lay thread for instance seems to be ODD for investment managers (ie for FOF hedge fund managers to monitor the PMs if the funds they invest in). I’m looking more for ODD during the M&A process, that involves synergy assessments, 100 day plans, etc

 

Sounds like the experience you're looking for is probably better served in commercial due diligence (CDD) than operational due diligence (ODD). See this thread, I had typed up a different response but this sums it all up pretty well:

https://www.wallstreetoasis.com/forums/pe-due-diligence

Difficulty is, at junior levels you don't usually place directly in the CDD teams at top firms (Strat& Deals is the only exception I'm aware of). Instead, you recruit for generalist roles and these projects are part of your rotation. So, you've got to land a top consulting offer to get top tier CDD work. ODD is much easier to obtain; these groups focus on gaining subject matter expertise, though, and honing in on a particular part of the operational value chain, it's not the hop around and see a ton of industries type of role that you seem the think it is.

 

Hmm interesting. The jobs I’ve seen posted in other areas seem to be for Big 4 and just based on the job description looks like they might cover a wider range of industries - the groups seem to be quite small and work within their transaction services practices (ie EYs Operational Transaction Services group)

 
Best Response

Big 4 are the ODD powerhouses. Individual groups may be small, expect multiple teams on projects with segmented workstreams based on expertise. A group might cover multiple industries, or they might be stuck in one industry vertical, many teams might be cross vertical but in one horizontal (industries are verticals, practice area is horizontal). The growth trajectory will be to specialize in some area of ODD, usually within one industry.

Bear in mind, these teams don't get hired to do "strategic thinking" or for their "problem solving skills". They are hired to perform repeatable tasks, such as optimizing a supply chain, that they have shown that they can do again and again. Questions like "should we have a supply chain" or "how should we conduct a search to find a firm that will enhance our supply chain" are left to the strategy group. Not saying that's a bad thing, but that's why you end up being more specialized sooner.

Projects can be longer length than you might think too. So even though you might not be tagged to an industry, if you only work on 2-4 projects in 2 years you're probably only working in 1-2 industries. You don't get to just hop around, you need to work to get staffed in consulting which means if you've done one project and it was at an O&G firm, your second project will most likely also be at an O&G firm. This is variable by group so take the perspective with a grain of salt. In nearly all cases, these groups are lower paying/lower prestige/lesser for exit ops than their strategy counterparts. I.e. Deloitte S&O, EY-Parthenon, PwC Strat&. Dynamic is the same at Accenture. I'd target those first if you check the boxes (target/semi-target, GPA, etc) and recruit for ODD as your backup if you're interested in the field.

 

Operational due diligence analysis is usually performed ON hedge funds by those investing in HFs. Perhaps this HF invests in other HFs. In which case, you'd be doing analysis on the BO operations of funds.

There has been an increase in this type of analysis over the past few years in response to the Madoffs of the world as well as all the HF implosions post-Lehman.

 
jqbuyside:
Operational due diligence analysis is usually performed ON hedge funds by those investing in HFs. Perhaps this HF invests in other HFs. In which case, you'd be doing analysis on the BO operations of funds.

There has been an increase in this type of analysis over the past few years in response to the Madoffs of the world as well as all the HF implosions post-Lehman.

Interesting. What is the market for such bodies of information? I'm already thinking of ways this can be used
Get busy living
 

Sorry, the job is actually at a FoF..

Main function of this job:

Reporting to the Head of U.S. Operational Due Diligence, you will perform operational due diligence on hedge funds and hedge funds’ service providers.

Main tasks and responsibilities:

▪ Planning and coordinating operational due diligence of hedge fund service providers (notably administrators and prime brokers)

▪ Reviewing hedge funds’ legal, financial and marketing information to create and maintain a database summarizing investment terms

▪ Reviewing financial statements and verifying the existence and accuracy assets

▪ Assisting with on-site operational due diligence reviews of hedge funds

▪ Managing the recording of operational due diligence information in the systems

 

Makes sense that it's a fund of fund.

I mean it's ops but at a hedge fund and might even be more interesting (more skill use, for sure). Trade entry, where I got my start on the buy side before going to b-school, sucks - badly. Trade settlement is just as bad, also from first hand experience.

You'll get potential fund interaction, you look over financial statements (translates to many front office jobs), and you'll build a network outside of just broker-side trade settlement people (and pissed off PMs when you can't settle something or there's a material error to the fund NAV).

This seems like a far better job than trade operations.

 

Ipsa explicabo quisquam molestias rerum est. Temporibus fuga nihil repudiandae voluptatem sed qui cumque. Blanditiis non commodi sequi porro sapiente dolorem sapiente tempora. Provident reprehenderit quo sint possimus mollitia earum. Optio non placeat dignissimos qui eos. Illo consectetur et ab non.

Career Advancement Opportunities

March 2024 Consulting

  • Bain & Company 99.4%
  • McKinsey and Co 98.9%
  • Boston Consulting Group (BCG) 98.3%
  • Oliver Wyman 97.7%
  • LEK Consulting 97.2%

Overall Employee Satisfaction

March 2024 Consulting

  • Bain & Company 99.4%
  • Cornerstone Research 98.9%
  • Boston Consulting Group (BCG) 98.3%
  • McKinsey and Co 97.7%
  • Oliver Wyman 97.2%

Professional Growth Opportunities

March 2024 Consulting

  • Bain & Company 99.4%
  • McKinsey and Co 98.9%
  • Boston Consulting Group (BCG) 98.3%
  • Oliver Wyman 97.7%
  • LEK Consulting 97.2%

Total Avg Compensation

March 2024 Consulting

  • Partner (4) $368
  • Principal (25) $277
  • Director/MD (55) $270
  • Vice President (47) $246
  • Engagement Manager (99) $225
  • Manager (152) $170
  • 2nd Year Associate (158) $140
  • 3rd+ Year Associate (108) $130
  • Senior Consultant (329) $130
  • Consultant (586) $119
  • 1st Year Associate (538) $119
  • NA (15) $119
  • 3rd+ Year Analyst (145) $115
  • Engineer (6) $114
  • 2nd Year Analyst (342) $102
  • Associate Consultant (166) $98
  • 1st Year Analyst (1046) $87
  • Intern/Summer Associate (188) $84
  • Intern/Summer Analyst (547) $67
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”