Institutional investors

Operational due diligence in alternative investments How can Russell's operational due diligence help your portfolio? Operational due diligence is distinct and complementary to research focused on investment aspects of managers' businesses Operational due diligence gives decision-makers another way to evaluate managers—and to help verify that they have the ability to deliver on their investment propositions. Operational and business issues have been leading factors in many fund failures—quality due diligence can help. According to a white paper from Capco Institute, 50% of hedge fund failures occurred because of operational issues and 6% failed due to business issues—compared to 38% that failed because of investment risks.¹ Our operational due diligence in alternative investments includes analysis of hedge, private equity and real estate funds. This research is embedded in Russell's funds of funds: This level of due diligence is conducted on the managers hired or considered for Russell fund portfolios or for outsourced operational due diligence assignments. Why choose us for operational due diligence in alternative investments? Russell is a recognized leader in manager due diligence For a fourth year in a row, Russell was voted among the top in manager due diligence by participants in a 2012 FundFire survey of institutional sales professionals.² Russell's team has practical investment and compliance experience. Our global manager oversight team has background and practical experience in understanding investment issues—in addition to investment operations, regulatory agencies and compliance. We have global scale, depth and perspective. Our team of professionals has knowledge of global managers and regulatory requirements to better serve clients—who invest globally or may be global in nature. We offer ongoing monitoring and support. We provide ongoing monitoring and/or follow-up support on issues and recommendations with managers. Related information Managing risk in investing with larger, brand-name investment managers 2010-2011 Russell Survey on Alternative Investing         We would welcome the opportunity to listen, learn about your objectives and discuss how the considerable resources at Russell can help your fund meet its goals.     West Coast David Rothenberg Managing Director 866-926-5934 East Coast Gerry Lillis Director 866-459-4128 ¹Feffer. S., and C. Kundro, 2003, 'Understanding and mitigating operational risk in hedge fund investing,' white paper series, Capco Institute, March 2003. ²Source: "Inst'l Sales Execs Praise Mercer, Russell, Callan", FundFire Survey for Institutional Sales Execs, February 2012 Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company. USI-12549