ODD became a standard discipline after fraud and operational failures showed that funds fail more often from weak controls than from bad trades. A typical ODD review covers structure and domicile, independence of the administrator and auditor, custody and withdrawal authority, NAV frequency and pricing sources, investor segregation, business continuity, fees and side letters, and regulatory status.
ODD teams have veto power at most institutional allocators, so a fund that cannot pass ODD cannot raise institutional money regardless of performance.