Mon, Dec 18, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: How not to invest in hedge funds (2)

Thursday, April 01, 2010

Written by Bryan Goh of London-based fund manager First Avenue Partners LLP.

Yesterday's Part One can be found here: Source

Understand the Manager. When one invests in a fund, one is really hiring the investment manager for the duration of the investment. When one hires someone, what are the considerations? Character and integrity, skill and technical expertise as evidenced by prior experience and by formal training, judgment, ability to manage people as much as investments, personality, are all considerations. Character and integrity can be checked with the use of professional background investigative services, court searches, regulatory registers, etc.

The value of reference checking is over estimated in hedge fund due diligence. All one gets is an opinion on whether someone is liked or disliked by the referee. References provided by the manager should carry little or no weight. In fact, the noise that that information brings can be so confusing one could argue that it should not even be sought. The analogous situation is a portfolio that is marked by the manager. If one will not accept that, don't take a reference supplied by the manager. The exception is references sought to corroborate and collect factual information. But this is a mechanical exercise that can be outsourced or delegated.

This implies that all the information and impressio......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Mediobanca acquires majority stakes in Swiss hedge fund[more]

    Komfie Manalo, Opalesque Asia: Listed diversified banking group Mediobanca SpA said it has acquired a majority stake in Geneva-based hedge fund firm RAM Active Investments SA (RAM AI), an active and alternative asset manager offering a range of act

  2. Northleaf Capital Partners closes debut private credit fund on $670M[more]

    Bailey McCann, Opalesque New York: Northleaf Capital Partners has closed its debut private credit fund - Northleaf Private Credit I - on $670 million. The vehicle will invest in private credit transactions in Europe and North America, with a primary focus on lending to private equity-backed compa

  3. ...And Finally - The ongoing gun saga in the U.S.[more]

    From Newsoftheweird.com: As elder members of the First United Methodist Church in Tellico Plains, Tennessee, gathered on Nov. 16 to discuss the recent church shooting in Sutherland Springs, Texas, one of those present asked if anyone had brought a gun to church. One man spoke up and said he c

  4. Opalesque Exclusive: Credit Suisse Asset Management's NEXT Investors leads $6M Series A round for LUX Technology and Services[more]

    Bailey McCann, Opalesque New York: Credit Suisse Asset Management's NEXT Investors has led a $6 million Series A funding round for LUX Technology and Services, a business and technology solutions provider for the alternative assets industry. The investment will be used to fuel growth of Trans

  5. eVestment: hedge funds extend winning streak[more]

    Bailey McCann, Opalesque New York: Hedge funds marked their 13th consecutive month of positive returns in November with +0.47% average returns for the month, according to the latest Hedge Fund Performance Report from eVestment. Activists, long/short and quant equity strategies are producing