Amaranth, Aurora, The Manhattan Fund, Bayou. To anyone invested in or interested in investing in hedge funds, these names evoke one thought: blow-ups. Knowing that these and other hedge funds have faltered is not particularly valuable; knowing how to avoid funds that might blow up, on the other hand, is crucial.
Hedge Fund Due Diligence provides a step-by-step methodology that will allow you to do just that. Based on a framework that hedge fund investigative expert Randy Shain has refined over the course of his successful career, this book offers an overview of due diligence into hedge fund management, how information on managers can be obtained, and why this information is essential to the investment community.
Including deconstructions of recent hedge fund blow-ups, this timely resource will alert you to the warning signs of potential problems and, more importantly, how to avoid them. By analyzing these examples, and explaining how you can develop this kind of research for yourself, Hedge Fund Due Diligence will allow you to make the most informed hedge fund investment decisions possible. And with the tools presented throughout the book, you'll have the knowledge you need to deduce how a hedge fund manager's previous behavior is likely to predict their future success.
Ch. 1 Hedge Fund Growth - What It Means to the Institution 1
Ch. 2 What is Due Diligence? What Are the Various Types of Due Diligence? 8
Ch. 3 What Kinds of Hedge Fund Failures Does the Press Discuss? Why Do Most Hedge Funds that Fall, Really Fall? 13
Ch. 4 Can the Chances of Investing in Future Failures Be Lessened/Prevented? How? 21
Ch. 5 Investigative Background Reports - The Beginning: Identify Your Target 31
Ch. 6 The Courts 47
Ch. 7 News Media: Is Nexis Your Only Option? 123
Ch. 8 Regulatory Bodies 137
Ch. 9 Credentials Verifications 166
Ch. 10 Corporate Records: Not Just D&B Anymore 171
Ch. 11 The Internet: What It Can Do and What It Can't 187
Ch. 12 Public Records - Is That All There Is? 197
Ch. 13 What You Think Is Helpful, But Isn't 228
Ch. 14 The Law 235
Ch. 15 Credit Reports 241
Ch. 16 Warning Signs: Red and Yellow Flags 248
Ch. 17 Conclusion 271
Notes 287
Index 295