Building Institutional‑Grade Governance: Yaniv Bertele’s Approach to Operational Risk in Alternatives

Operational risk is the silent compounding factor in alternative asset management. When it’s well managed, investors rarely notice. When it fails, the consequences extend far beyond the immediate incident-fundraising stalls, counterparties retrench, investment committees re‑open mandates, and confidence can take years to rebuild.

That reality has been underscored by recent operational breakdowns in adjacent insurance‑linked strategies, where forged or improperly verified collateral documentation triggered a broader credibility shock. Even managers with no direct connection to those events felt the aftershocks: deeper operational due diligence, longer approval cycles, and heightened scrutiny on valuation, custody, and third‑party verification.

For Yaniv Bertele, founder of EverOak Innovations, this isn’t simply a compliance issue-it’s a strategic choice. “Institutional investors don’t allocate to promises. They allocate to systems,” he says. “Governance is preventive infrastructure. If you treat it as a minimum requirement, you’re building fragility into the business.”

In insurance‑linked alternatives-especially longevity‑exposed assets such as life settlements-Bertele argues that governance is not just protection. It’s differentiation.

Governance as Preventive Infrastructure 

Most institutional investors understand that rules exist-custody requirements, disclosure obligations, internal controls. The question allocators increasingly ask is not whether those boxes are checked, but whether the manager’s architecture is designed to make failure difficult.

Bertele frames institutional‑grade governance as a layered verification system:

1) Separation of powers: oversight that can say “no” 

Sophisticated allocators look for independent oversight that is empowered, competent, and active-especially in asset classes where valuation relies on models and workflows rather than exchange prints.

Effective governance is not a ceremonial board. It is a fiduciary layer that can challenge decisions, demand evidence, and require corrective action. In Bertele’s view, the strongest structures include individuals with backgrounds in regulation, audit, institutional investing, or operational risk-people who know how failures happen and where controls tend to break.

“If authority is concentrated, risk is concentrated,” he says. “Strong governance distributes authority and makes verification mandatory.”

2) Independent administration: verify the asset, not the story 

A core principle of institutional operational due diligence is that the investment manager should not be the sole source of truth.

Third‑party administrators (TPAs) and independent service providers create operational separation between investment decisions and transaction execution. In insurance‑linked strategies, that independence matters because the operational workflow is part of the risk engine: documentation integrity, servicing, premium flows, and status updates are as important as macro factors are to traditional portfolios.

In life settlements specifically, institutional governance typically demands independent confirmation of:

• policy authenticity (including carrier verification),
• premium payment execution and tracking,
• beneficiary/ownership chain integrity,
• policy status monitoring and event logging,
• documentation completeness and audit trails.

This is how a manager moves from “trust us” to “here is the evidence.”

3) Custody and cash controls: design the money movement perimeter 

Baseline custody rules require qualified custodians for client assets under many advisory structures. Institutional allocators go further: they evaluate whether custody is paired with segregated cash architecture, clear authorization protocols, and documented controls for capital deployment.

Institutional‑grade practices commonly include:

• segregated accounts by vehicle (and often by function),
• dual authorization for wires and material approvals,
• call‑back procedures and standing‑instruction controls,
• reconciliation routines independent of the portfolio team,
• exception reporting routed to oversight functions (not only investment staff).

“Operational control is not a document. It’s a perimeter,” Bertele notes. “You want controls that work on bad days, not just good days.”

4) Valuation governance: treat model risk as first‑class risk 

Insurance‑linked and longevity‑exposed strategies often involve Level 3 valuation elements under ASC 820 / IFRS 13-unobservable inputs, model‑driven marks, and sensitivity to assumptions.

That doesn’t disqualify the asset. It does mean the valuation process must be governed like an institutional process:

• documented methodology and assumptions,
• independent review or pricing committee,
• periodic back‑testing and calibration,
• clear escalation when model outputs diverge from evidence,
• investor reporting that includes sensitivity bands and drivers.

Bertele’s point is simple: “If valuation can’t be explained, it can’t be trusted-and if it can’t be trusted, it can’t scale.”

Reputation Risk and Institutional Response 

Operational incidents in alternatives often produce a disproportionate market reaction because investors know two things:

1. the true scope of a control failure is rarely visible on day one, and
2. the damage is frequently cultural as much as technical.

Even when a problem is contained financially, institutional committees respond with:

• expanded diligence requirements,
• re‑negotiation of terms and fees,
• slower approvals and smaller initial allocations,
• and, in some cases, temporary moratoriums on adjacent strategies.

This “contagion effect” is especially pronounced in niche areas like insurance‑linked alternatives, where a single scandal can paint the entire category as opaque.

Bertele’s approach emphasizes proactive transparency as a governance tool, not a PR tactic:

• disclose material incidents quickly and factually,
• provide structured updates with clear next steps,
• publish a post‑mortem with corrective actions tied to owners and timelines,
• demonstrate how the control environment has changed-not just that it will.

“Silence isn’t neutral in a crisis,” he says. “Investors assume the worst when they don’t have a controlled narrative backed by evidence.”

Operational Continuity Planning: Beyond Disaster Recovery 

Institutional investors increasingly define “business continuity” as more than systems uptime. They evaluate whether the strategy can operate through stress, turnover, vendor failures, and cyber disruption.

Key‑person and process continuity 

Committees ask whether the strategy depends on a single individual’s judgment or relationships. Institutional‑grade managers document workflows so that execution can continue even if key personnel depart.

Best practice includes:

• documented investment and servicing processes,
• cross‑training and role coverage plans,
• governance mechanisms that preserve institutional knowledge.

Service provider redundancy 

Longevity‑exposed strategies rely on specialized vendors-medical underwriting, servicing, data providers, legal support. Concentration in one provider introduces fragility. Institutional allocators increasingly prefer managers with redundancy across critical functions, so operations can continue if a provider relationship is disrupted.

Technology resilience and cybersecurity 

Operational risk is now inseparable from cyber risk. Institutional investors commonly expect:

• cloud resilience with tested recovery protocols,
• access controls with least‑privilege permissions,
• multi‑factor authentication,
• encryption at rest and in transit,
• centralized logging and monitoring,
• regular vulnerability management and penetration testing.

Privacy and medical record handling 

Life settlements add a unique operational dimension: medical records. Mishandling sensitive data can trigger reputational and regulatory consequences disproportionate to the direct financial impact.

Institutional‑grade privacy operations typically require:

• secure transmission and storage,
• role‑based access controls and audit trails,
• vendor agreements and oversight for any entity handling records,
• documented incident response playbooks for privacy events.

Market Recovery and Positioning: The New Entrant Advantage 

Post‑crisis environments often create a reset in expectations. For new entrants, that can be an advantage-if they build governance into the foundation rather than retrofitting it later.

Bertele argues that institutional investors are not looking for managers who claim immunity from industry problems. They want managers who:

• understand what failed and why,
• can show how their controls address those failure modes,
• and can prove that governance is operationalized, not merely stated.

“In this market, governance is not marketing. It’s product,” he says. “It’s the thing you’re selling alongside returns: reliability, auditability, and resilience.”

What Institutional Committees Should Test 

For allocators building an operational due diligence framework, the essentials are increasingly consistent across strategies:

Governance and Oversight 

• independence and qualifications of trustees/board,
• cadence and evidence of active oversight,
• escalation protocols and decision rights.

Administration and Verification 

• scope of third‑party administration and reconciliation,
• independent verification procedures for assets and cash flows,
• transparency of audit trails and exception handling.

Cash and Custody Controls 

• account segregation and authorization rules,
• wire controls, call‑backs, and dual approvals,
• reconciliation frequency and independence.

Valuation Discipline 

• methodology documentation,
• independent review structure,
• sensitivity reporting and back‑testing routines.

Continuity and Cyber 

• disaster recovery testing evidence,
• vendor redundancy,
• cybersecurity controls and testing program.

People Risk 

• succession plans and cross‑training,
• role coverage maps and knowledge retention.

Site Visits and References 

• transaction walkthroughs and control testing,
• confidential interviews with operational staff,
• references with service providers and prior investors.

The Bottom Line 

In alternative asset management, operational risk is not a side issue. It is a core determinant of scalability, survivability, and institutional trust.

Yaniv Bertele’s governance philosophy is built around a clear institutional truth: returns attract attention, but controls earn permission. Managers who invest early in independent oversight, third‑party verification, resilient operations, and transparent reporting don’t just reduce downside-they position themselves as allocatable when committees are most cautious.

Or, as Bertele puts it: “Performance can win a quarter. Governance wins a decade.”

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