By Rajiv Jaitly
Tighten due diligence methods for extra winning hedge fund investment
Practical Operational Due Diligence on Hedge Funds is an encyclopaedic, complete reference, written from the point of view of an skilled practitioner. followed by way of an invaluable archive of actual fabric on diverse hedge fund concerns, together with mess ups, fines, and closures, this ebook makes a speciality of the parts due diligence execs may still deal with, and explains why they're vital. vast dialogue of publicised circumstances identifies the chief entities and real fund autos concerned, and offers observation on what might have been performed otherwise in each one case, subsidized via genuine regulatory fabrics, akin to SEC proceedings, that recreate the occasions that happened. Readers achieve a deeper realizing of the numerous elements of due diligence and the various attainable pitfalls, studying how standardise techniques and steer clear of significant error and oversights.
The sum of money controlled by means of hedge money has nearly doubled from the $1 trillion lower than administration on the time of the monetary concern. Hedge money might be super dicy, yet may be super ecocnomic — as funds more and more flows again in, due diligence on those replacement investments turns into progressively more serious. This e-book presents whole information towards the due diligence strategy, with ample real-world examples.
- Identify the components of due diligence and what can move wrong
- Create methods and checklists to minimise errors
- Learn what publicised circumstances may have performed differently
- Gain a deeper knowing of big disasters and successes
Proper due diligence could be a giant venture, yet thoroughness is vital whilst the cost of failure is so excessive. Practical Operational Due Diligence on Hedge Funds presents the main points pros have to be on element each time.
Read or Download Practical Operational Due Diligence on Hedge Funds: Processes, Procedures, and Case Studies PDF
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Additional info for Practical Operational Due Diligence on Hedge Funds: Processes, Procedures, and Case Studies
The Alternative Investment Funds Directive (AIFMD) in Europe makes the definition even more interesting as possibly everything that is a collective investment but not an Undertaking in Collective Investments in Transferable Securities (UCITS) is now likely to be an Alternative Investment Fund if it does not fall under one of the specified exemptions. To quote Circuit Judge Randolph in Phillip Goldstein, et al v Securities and Exchange Commission: “‘Hedge funds’ are notoriously difficult to define.
Due diligence is unlikely to uncover fraud but it should be able to identify the environment in which it could arise and an analysis of operational controls should be one of the basic exercises that are conducted. ” In it they included an interesting table entitled “Methods used to override controls”. They linked this back to an earlier survey in 2007 to show changes in these methodologies. The table showed that in 2011, 74% of the methods used were effectively the exploitation of weak internal controls.
The fund is not technically insolvent, but the process of entering into winding up procedures is an operational issue – the investors will more often than not have suffered losses and the fund ceases to exist. These closures can also skew industry analysis because the reported results of hedge fund performance then have an implicit survivorship bias as managers no longer report information on funds that have closed. 4 INVESTMENT LOSSES OUTSIDE THE FUND’S STATED VOLATILITY RANGE While an investment loss is a phenomenon that just about every investor experiences at one time or another, the event is rarely viewed in a positive light.