Synopses & Reviews

Publisher Comments:

Hedge Fund Operational Due Diligence

Understanding the Risks

One need only glance at the cover of the Wall Street Journal or turn on CNBC to learn about the latest debacle befalling hedge funds, due to poor operational oversight and controls. Long viewed by many hedge fund investment professionals as one of life’s necessary evils and a distraction from the real business of investing, the field of operational due diligence has finally caught on today as an essential area of hedge fund risk management.

Filled with real-world examples drawn from the author’s experiences dealing with the operational risks of a global hedge fund platform, Hedge Fund Operational Due Diligence: Understanding the Risks clearly outlines a flexible framework to enable you to diagnose a hedge fund’s operational risks. This user-friendly, step-by-step guide shows you how to effectively detect and evaluate often-overlooked operational risk factors in hedge funds, such as multijurisdictional regulatory coordination, silo creation, operational drag, organizational nesting, and vaporware, to equip you with a complete understanding of the importance and benefits of a comprehensive operational due diligence program.

Designed to enable hedge fund personnel to perform self-diagnostic health checks and determine areas in which operational improvements are needed using the techniques described, this timely book:

Features an analysis of the failed Bayou Hedge Fund Group, highlighting how operational risks can bring down an organization

A strong operational infrastructure serves as a crucial backbone to the modern hedge fund, without which even the smartest money managers in the world could not thrive. Hedge Fund Operational Due Diligence: Understanding the Risks provides you with the necessary tools to effectively consider operational reviews in conjunction with investment reviews.

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 diligencemany 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 decisionsthat 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

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.