Laven Partners, the consulting firm, has rolled out its Redflag Database for professional investors in hedge funds and fund of hedge funds, in a venture the firm hopes will make it easier for people to make due diligence checks.

The Redflag Database was designed to provide investors with information on performance and operational issues. As well as quantitative data, the system produces information on liquidity, fees, investment processes, risk management and compliance. The Redflag Database also includes background checks on key individuals and information on the quality of service providers.

Due diligence checks on investments has been placed under the spotlight by the Bernard Madoff scandal. A number of hedge fund and other types of investors allocated capital to the Ponzi scheme fraudster, prompting calls for more rigorous scrutiny of investments and managers.

Funds on the database go through an initial selection process, which includes reviewing the risk adjusted returns of thousands of funds in the alternative space, and identifying only those which have a proven ability to perform in both positive and negative markets, Laven said in a statement.

The project was beta-tested in September last year.

“The Bernard Madoff scandal showed that investment decisions were sometimes made without proper investment or operational due diligence. We hope that the Redflag Database will change the way investors make their investment allocations, particularly to alternative funds,” said Max Ferri, manager at Laven Partners.