Due Diligence Questions

Hedge Fund Due Diligence Questions

Last month I found this article on questions you should ask during a hedge fund due diligence process. While nothing within this blog should be taken as financial advice this article and the hedge fund due diligence guide on my website might give you a high level overview of hedge fund due diligence.

According to Douglas Dick, the best place to look for information on the hedge fund you are completing due diligence on is in the offering memorandum. This document will state all the hedge funds outside supporters, from law firms to independent contributors. The first sign of caution is when you ask a question that the hedge fund is not willing to answer. Willingness to answer all questions without it being too much of a hassle is a small but good sign and will be the foundation for a trustful relationship between you and the fund.

Here are four questions to consider during your time of due diligence. They’ll allow you to get started but it’s extremely important to do thorough research with an expert into all aspects of the fund.

Does the hedge fund use a third party marketing firm?
What technology services do they use? How are they supported?
What law firms are involved with the fund? What other types of hedge funds do they work with?
Who is the outside administration?

Looking into how the hedge fund presents itself and works from the outside is always an important thing. It’s equally important, however, to look at the hedge fund from the inside too. By asking some of these questions you’ll be able to discover valuable information that will eventually help you decide where you will invest your money.

Read more articles like this within the Hedge Fund Due Diligence Guide.

- Richard

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