The Pangaea approach to prime broker due diligence is intended to provide structure and depth to the annual review of your financing providers and improve the effectiveness of that review. The key is not just the depth of the questions but ensuring that the appropriate group/person is answering those questions. It is critical that the person who is the expert on that topic answers your questions.
The Counterparty Risk Review (CPRR) is a web-based tool, utilizing technology provided by Thomas Murray Data Services (http://ds.thomasmurray.com), built around a comprehensive question library covering a broad range of topics. In addition the web-based tool allows responses to be stored facilitating year over year analytics for each prime broker and across your primes. It also creates a more efficient process for the prime brokers to complete the questionnaires by allowing the stored responses to be reused and multiple areas within the bank’s organization to enter responses.
The CPRR leverages a hedge fund’s ability to evaluate the continuum of risks they have with their prime brokers. The annual review provides your firm with current information on the control environment, asset protection, business investment and risk management practices at each of your financing providers.