Catalina Partners is an operational risk consultancy that focuses on the needs of the alternative investment industry. We specialize in assessing key business risks including operations, liquidity, leverage, counterparty and compliance, and identifying solutions to monitor and mitigate those risks. Our rigorous assessments allow investors and advisors to make fully-informed funding decisions, which rely on the identification and implementation of appropriate controls and compliance enhancements.
Catalina Partners was founded to address the business risk exposure issues that emerged during the 2008 financial crisis and subsequent Ponzi scheme scandals. We are engaged as independent risk consultants to provide evidence-based and risk-based due diligence for institutional investors. We also assist investment advisors with meeting industry best business practices demanded by investors, regulators, and auditors.
Catalina Partners provides a “safe harbor” for investors and advisors alike to understand and monitor business risks, take action to mitigate them, and make informed business decisions. We believe the most valuable outcome of our services is bringing institutional investors the confidence and assurances they need to do business with their investment advisors, as those advisors maximize risk management and operational excellence.
New Business Risk Paradigm
Recent events have dramatically changed investors’ decision-making criteria for selecting an advisor. The business risks associated with each investment are under the microscope as never before, and the findings are key drivers to any decision to buy, hold or sell. Consider how and why the paradigm shift took hold.
The Global Financial Crisis brought on by over-inflated real estate values, over-zealous securitization markets and lax enforcement of regulations unleashed a financial storm of global proportions. The resulting market and economic meltdown caused a profound crisis of confidence in government and the entire financial services industry.
The Madoff Scandal demonstrated that pre-funding and post-investment operational due diligence needs to be a critical component of any institutional investment decision. Heightened awareness of operational risk forced investment advisors to reexamine their middle- and back-office processes, governance and controls, make necessary enhancements, and seek opportunities to increase transparency to investors.