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Benedicte Gravrand, Geneva: Looking back at the 2007 emerging trends in the hedge fund industry, one can see ‘outsourcing’ – and especially due diligence outsourcing - around the top of the list. Investing in hedge funds without proper prior research is no longer seen as mildly unwise, it is now seen as downright reckless; the industry has had quite enough blow-ups to expose the mistake of sloppy research. Opalesque talked to a newcomer into the outsourcing game, an analyst who has just set up shop offering due diligence services to investors, who exposed his ideas about what DD amounts to.

Hedge Fund Appraisal is based in Geneva and was founded in 2007 by Gabriel Kurland; its mission is ‘to help hedge fund investors take informed decision.’ Gabriel Kurland, (CAIA), previously held the positions of hedge fund co-manager and hedge fund analyst at Anglo Irish Bank and at HSBC Republic. Mr. Kurland travels frequently to meet both his clients and the hedge fund managers he is to assess.

Hedge fund analysis: appraising the two types of risks Hedge funds carry two types of risks, says HFA’s presentation, financial risks and non-financial risks. While the first type is a source of returns, the later is a source of risks “without reward”.

“Everyone focuses on the track record when looking at a hedge fund as track records show the investment risks,” he said. “The operational risks are even risks and incur g......................

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