Cash Management

Cash Management Due Diligence Check

I recently found an article on conducting a cash management based hedge fund due diligence check. The relatively few major scandals involving hedge funds have led many investors to call for greater transparency and impose stronger due diligence. Investors hoping to reduce the chance of fraud or theft view cash management as a critical aspect of due diligence. They want to know where the money is going, how it is protected and ensure accountability for their investment. The focus on cash management has created a push for accountability and separation of duties so that one entity does not have too much responsibility.

This article believes that hedge fund managers can expect to answer more rigorous cash management questions involving the basics, how the money is invested, reporting and reconciliation, and subscription and redemptions. After numerous hedge fund frauds and thefts, how the fund manages an investor's money has become a priority in due diligence. Managers can view this article as a method for assessing weaknesses and investors can use this to improve due diligence and protect their investment from poor cash management.

Resource: Due Diligence Check - Cash Holdings

- Richard

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