Details

Practical Operational Due Diligence on Hedge Funds


Practical Operational Due Diligence on Hedge Funds

Processes, Procedures, and Case Studies
The Wiley Finance Series 1. Aufl.

von: Rajiv Jaitly

122,99 €

Verlag: Wiley
Format: EPUB
Veröffentl.: 05.02.2016
ISBN/EAN: 9781119018742
Sprache: englisch
Anzahl Seiten: 872

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Beschreibungen

<b>Tighten due diligence procedures for more successful hedge fund investment</b> <p><i>Practical Operational Due Diligence on Hedge Funds</i> is an encyclopaedic, comprehensive reference, written from the perspective of an experienced practitioner. Accompanied by a useful archive of factual material on different hedge fund issues, including failures, fines, and closures, this book focuses on the areas due diligence professionals should address, and explains why they're important. Extensive discussion of publicised cases identifies the manager entities and actual fund vehicles involved, and provides commentary on what could have been done differently in each case, backed by actual regulatory materials, such as SEC complaints, that recreate the events that took place. Readers gain a deeper understanding of the many facets of due diligence and the many possible pitfalls, learning how standardise processes and avoid major errors and oversights.</p> <p>The amount of money managed by hedge funds has almost doubled from the $1 trillion under management at the time of the financial crisis. Hedge funds can be extremely risky, but can be extremely profitable — as money increasingly flows back in, due diligence on these alternative investments becomes more and more critical. This book provides complete guidance toward the due diligence process, with plentiful real-world examples.</p> <ul> <li>Identify the areas of due diligence and what can go wrong</li> <li>Create procedures and checklists to minimise errors</li> <li>Learn what publicised cases could have done differently</li> <li>Gain a deeper understanding of massive failures and successes</li> </ul> <p>Proper due diligence can be a massive undertaking, but thoroughness is essential when the price of failure is so high. <i>Practical Operational Due Diligence on Hedge Funds</i> provides the details professionals need to be on point every time.</p>
<p>Preface xIiii</p> <p>Acknowledgments xIvii</p> <p>About the Author xIix</p> <p>Disclaimer Ii</p> <p><b>PART I Processes and Procedures</b></p> <p>CHAPTER 1 What is a Hedge Fund? 3</p> <p>CHAPTER 2 Defining Operational Issues 7</p> <p>CHAPTER 3 Structures for Investment in Alternatives 15</p> <p>CHAPTER 4 Is the Fund for Real? Establishing the Basics 25</p> <p>CHAPTER 5 Understanding Fund Operations and Controls 61</p> <p>CHAPTER 6 Governance – Managing Risk Through a Non-Executive Board 65</p> <p>CHAPTER 7 Reporting to Members and Statutory Reporting 75</p> <p>CHAPTER 8 The Curse of Leverage (Fund Liabilities) 87</p> <p>CHAPTER 9 Fund Assets 103</p> <p>CHAPTER 10 Fraud 129</p> <p>CHAPTER 11 Fees: the Essence of Hedge Funds 137</p> <p>CHAPTER 12 Regulatory Actions, Politics and Market Confidence 149</p> <p>CHAPTER 13 Key Man Risk, Disaster Recovery and Business Continuity 175</p> <p>CHAPTER 14 Negotiating Terms and Exercising Rights 181</p> <p>CHAPTER 15 Risk Ratings and Scoring 195</p> <p>CHAPTER 16 Marketing to Investors 229</p> <p><b>PART II Case Studies</b></p> <p>CHAPTER 17 Case Studies Pre-2000 239</p> <p>CHAPTER 18 Case Studies 2000 275</p> <p>CHAPTER 19 Case Studies 2001 285</p> <p>CHAPTER 20 Case Studies 2002 289</p> <p>CHAPTER 21 Case Studies 2003 297</p> <p>CHAPTER 22 Case Studies 2004 313</p> <p>CHAPTER 23 Case Studies 2005 319</p> <p>CHAPTER 24 Case Studies 2006 359</p> <p>CHAPTER 25 Cases Studies 2007 401</p> <p>CHAPTER 26 Case Studies 2008 475</p> <p>CHAPTER 27 Case Studies 2009 601</p> <p>CHAPTER 28 Case Studies 2010 677</p> <p>CHAPTER 29 Case Studies 2011 717</p> <p>CHAPTER 30 Case Studies 2012 773</p> <p>APPENDIX A Index of Case Studies by Investment Manager 785</p> <p>APPENDIX B UK Serious Fraud Office Hedge Fund Investor Questionnaire 793</p> <p>INDEX 795</p> <p>LIST OF FUNDS 800</p> <p>LIST OF FUND MANAGERS 805</p>
<p><b>RAJIV JAITLY</b> is the managing partner at Jaitly LLP, a risk consultancy that provides independent risk, fund governance and operational due diligence services to global alternative investment clients. He set up and managed due diligence and investment management operations for the alternative investment asset businesses of major companies such as UBS, Santander and AXA. Jaitly has also advised the Regulatory Policy team of the U.K. Pensions Regulator, was appointed an expert by the UK Office of Fair Trading for its market study into the UK defined contributions pensions market and was commissioned by the UK Financial Services Consumer Panel to write a report on Fund Costs and their implications. He has also held appointments as a non-executive director of funds. </p>
<p>Hedge funds promise much, but also present considerable investment and operational risks – especially if the due diligence performed is inadequate. Although many claim to do detailed due diligence it can potentially be flawed, look at the wrong information and evidence, be deficient in some respects or, in some cases, be entirely absent. Operational risk on hedge funds is considered by many to be a major factor in assessing their viability and success and that is why operational due diligence is an important process in the selection and monitoring of hedge fund investments by investors. Whether the issues to consider are operational problems, inadequate infrastructure, documentation, poor service providers, inexperienced staff, remuneration issues, or simply denial, an investment decision with inadequate operational due diligence can potentially go very quickly from being unremarkable to catastrophic. </p> <p><i>Practical Operational Due Diligence on Hedge Funds</i> by Rajiv Jaitly is a comprehensive guide on how to perform operational due diligence on fund structures and their investment managers, helping to make better investment choices and decisions and avoid potential disaster. Throughout, the author explains what to focus on and why, what red flags to watch, and what lessons might be drawn from the experiences of investors in hedge funds and points to negotiate on. <p> This book includes a library of 300+ detailed case studies of issues on hedge funds going back to situations with the earliest hedge funds in the 1970’s right up to 2012. Nothing is more enlightening and valuable than these actual case studies making up more than half of the book. Each case study walks the reader through the financial and other predicaments faced by investors and investment managers, the decisions that were made and the outcomes that resulted. Each case is then analysed in depth, demarcating key issues and highlighting key lessons to be taken away in order to avoid repeating the mistakes of others. <p> Although the book is written with the due diligence professional in mind, it will be of interest to anyone making investment decisions that involve hedge funds or any other type of fund. It will also be of interest to investment managers and service providers in providing an insight into how they can improve their investment offerings to investors. <p> It offers a wealth of tools and techniques that aid the practitioner in performing due diligence with the level of care that is required given the amounts often at stake. Critical issues covered include: <ul><li>Establishing the existence of adequate controls in the operations of an investment manager</li> <li>Understanding the operation of leverage and related risks</li> <li>Scoring risks on a hedge fund</li> <li>Managing risks of conducting due diligence</li> <li>Negotiating terms of investment</li> <li>Checklists</li> <li>Guidelines for non-executive boards to review risk</li> <li>Rational for different fund structures</li> <li>Regulatory enforcement actions</li></ul> <p> If you are performing due diligence or making investment decisions involving hedge funds this is a book that you cannot afford to be without.

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