Institutional allocators have gotten serious about operational due diligence (ODD). Investment committee structure, team stability, compliance documentation, legal review — the standard ODD questionnaire now covers most of what a manager’s operational risk profile looks like. But one subject most questionnaires do not always address is the specific mechanics of how that manager moves capital: how distributions get wired, how counterparty banking details are verified before a transfer executes, and what documentation exists to prove a wire went where it was supposed to go.
That omission matters for real estate, where capital often moves through more parties than in other private asset classes. It is also becoming more relevant as fraud tactics evolve and legal expectations around preventable losses continue to develop.
Real estate moves capital through more parties than other asset classes. A single distribution event in a real estate fund can involve the fund manag
