Hedge Fund Operational Risk
Hedge Funds - Operation Risk Assessments
As the hedge fund industry. matures and manages more assets, investors have developed more thorough due diligence practices. In this white paper cited below investors are warned to scrutinize the operational structure of a fund, as the author believes that some hedge funds are poorly managed with a small staff relative to the massive assets under management.This white paper recommends a rigorous operational due diligence review that covers the manager's overall fund structure, back office structure, valuation and independent oversight. The guide looks at several key considerations for hedge fund investors: the experience of the operations personnel, compliance, internal operations, portfolio pricing and the quality of the service providers. There is good news on operational infrastructure, in that middle office functionality has improved with the addition of more major outsourcing providers. Yet a thorough operational due diligence review is still very necessary for hedge fund investors. I thought this resource might be useful to many fund of fund professionals and investors.
Resource: Whitepaper on Hedge Fund Operational Risk & Transparency
- Richard
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Tags: Hedge Funds Operational Risks, Operational Risks of Hedge Funds, Operational Riskiness of Hedge Fund Investing, Operational risk assessment for hedge fund investments
