Hedge Fund Operational Due Diligence

This book provides the necessary tools to consider operational reviews in conjunction with investment reviews. It will provide a step-by-step guide to the operational due diligence process involving hedge funds. Praise for Hedge Fund Operational Due Diligence: Understanding the Risks "This book should be required reading for anyone who wants to successfully invest in hedge funds. As operational problems are reputed to cause over 50% of all hedge fund failures, it is essential that hedge fund analysts understand how to conduct proper operational due diligence—many firms are only now starting to understand the importance of this skill set. Mr. Scharfman's book will go a long way towards educating analysts in this critical area." —Ed Rogers, CEO, Rogers Investment Advisors, LLC "Scharfman has written an excellent book! Highly accessible . . . covers crucial topics! This book should be read by all analysts who cover the hedge funds space. It also furnishes a very valuable and necessary addition to the MBA finance curriculum. Solid operational infrastructure is exactly what the smart institutional investors are demanding, and rightly so. Scharfman's book is going to help make a lot of good decisions—that is, for those who are prudent enough to read it." —Dr. Ranjan Bhaduri, Managing DirectorAlphaMetrix, LLC A straightforward how-to guide for conductingeffective hedge fund operational due diligence Providing a hands-on, step-by-step guide to the operational due diligence process involving hedge funds, Hedge Fund Operational Due Diligence: Understanding the Risks addresses essential issues including: Why you should care about operational risk Who is qualified to perform an operational risk review How you can easily create an initial operational profile The gray areas of operational due diligence Ten tips when performing an operational due diligence review Techniques for modeling operational risk Packed with insight and tips to help you diagnose and monitor key hedge fund operational risks, Hedge Fund Operational Due Diligence: Understanding the Risks is required reading for every hedge fund analyst and investor. How to diagnose and monitor key hedge fund operational risks With the various scandals taking place with hedge funds, now more than ever, both financial and operational risks must be examined. Revealing how to effectively detect and evaluate often-overlooked operational risk factors in hedge funds, such as multi-jurisdictional regulatory coordination, organizational nesting, and vaporware, Hedge Fund Operational Due Diligence includes real-world examples drawn from the author's experiences dealing with the operational risks of a global platform of over 80 hedge funds, funds of hedge funds, private equity, and real estate managers.