The practice will assist a wide range of investors, including pension plans, endowments, family offices and fund of funds to assess the operational risks associated with their alternative investments and provide solutions to mitigate those risks.

"In an era of heightened scrutiny, robust operational and risk policies and procedures are critical to attracting and keeping investors," says Gerry Creagh, president of Duff & Phelps (pictured). "Proper assessment of a fund's legal and operational infrastructure enhances transparency and has the potential to reduce risk to funds and investors."

The operational risk due diligence practice is led by new Duff & Phelps director Eric S. Lazear, a well-known operational risk practitioner and thought leader. Lazear specializes in fund structures, trading processes, legal issues and pricing procedures and is a frequent speaker at conferences around the world.

Prior to joining Duff & Phelps in the New York office, Lazear was head of operational due diligence for a London-based fund of hedge funds for institutions and private clients. He was responsible for conducting operational and business risk reviews of hedge fund managers and oversaw operational risk reviews for an array of hedge fund strategies worldwide. Lazear has 17 years of financial services experience with seven years dedicated to operational risk and serves on the board of directors for the Hedge Fund Business Operations Association.

"Research has shown that over 50 per cent of hedge fund failures are caused by operational issues," says Michael Athanason, head of Duff & Phelps' corporate finance consulting segment. "Under the experienced leadership of Eric Lazear, the operational risk due diligence practice offers a complementary service to our private equity and hedge fund clients and increases security for their investors."