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Opalesque Exclusive: Due Diligence procedures of FoFs get a reality check: Just a marketing gimmick? By Matthias Knab: I was recently asked to comment on the question if I thought that investors actually distinguished between FoHFs that were simply access and those doing actual due diligence.

This brought back to memory an "Other Voices" article by Dr John S. Wisnioski from Singapore-based Gan Consulting Pte Ltd, which we published in Opalesque on July 5th 2005. It is worth re-reading:

"The due diligence process is one of the most discussed topics with respect to the burgeoning investment asset class called hedge funds.

“I have helped develop an underlying hedge fund manager from less than US$10 million under management to close to US$150 million in about 18 months when our performance was only 10%+. Often when I read memos or guides outlining the procedures for hedge fund manager due diligence, I immediately think that this author/consultant has never worked in an underlying hedge fund firm. Owning, running or selling a hedge fund product, yields unsurpassed insight into the needs of the investor, and the intricacies of the information that concerns the potential investor.

“Many funds of funds and investors have stringent internal procedures for manager selection that dictate standards for the lifecycle, performance and size dynamics attributable to potential new investments. However, in my experience with that underlying manager based......................

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