Hedge Fund Due Diligence: Professional Tools to Investigate Hedge Fund Managers
Amaranth. Aurora. The Manhattan Fund. Bayou. To anyone invested in or interested in investing in hedge funds, these names evoke one thought: blow-ups. Knowing that these and other hedge funds have faltered is not particularly valuable; knowing how to avoid funds that might blow up, on the other hand, is crucial.Hedge Fund Due Diligence provides a step-by-step methodology that will allow you to do just that. Based on a framework that hedge fund investigative expert Randy Shain has refined over the course of his successful career, this book offers an overview of due diligence into hedge fund management, how information on managers can be obtained, and why this information is essential to the investment community.Including deconstructions of recent hedge fund blow-ups, this timely resource will alert you to the warning signs of potential problems and, more importantly, how to avoid them. By analyzing these examples, and explaining how you can develop this kind of research for yourself, Hedge Fund Due Diligence will allow you to make the most informed hedge fund investment decisions possible. And with the tools presented throughout the book, you'll have the knowledge you need to deduce how a hedge fund manager's previous behavior is likely to predict their future success.While you might consider this a tough task, a lot of it has to do with asking the right questions—of your staff, your vendors, and the managers themselves. Just as you know how to ferret out information from a hedge fund manager regarding their strategy, leverage, and where they put their cash, this book will serve as a guide to the types of due diligence questions you should be asking.Essential issues addressed throughout these pages include:Why do most hedge funds really fail?What are the various types of due diligence?Can the chances of investing in future failuresbe lessened or prevented?What are the best ways to find public records—from court documents and news  files to corporate recordsHow effective is the Internet in the due diligence process?And much moreWhether you investigate a hedge fund yourself or choose to outsource the initiative, Hedge Fund Due Diligence will arm you with the insights needed to uncover potential pitfalls before it's too late.