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Due Diligence on Hedge Funds
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Fee: £999 + VAT
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Berkeley Square House, Mayfair - London
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Due to the recent cases of fraud (Madoff scam et al) and other operational driven issues the hedge fund industry will look very different in 2010. Investors, service providers and other market participants interested in hedge funds will have to ask questions as to the stability of hedge funds. The trainer, Jacob H Schmidt, will cover all aspects of proper due diligence in this course.
Topics: purpose of due diligence, its objectives as well as its various forms. It also examines the several dimensions of due diligence including risk assessment, operations, valuation and administration.
Objectives: the delegates such as investors (pension funds, endowments, hedge fund of funds and family offices), advisers, service providers and third parties will learn all key aspects of operational hedge fund due diligence.
Format: presentations by trainer, interactive discussions between trainer and delegates, case studies and exercises by delegates
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20 - 20 October 2010
| London - Mayfair |
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Course Director(s)
Jacob Schmidt |
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| What You Will Learn |
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This course is suitable for investors (pension funds, endowments, hedge fund of funds and family offices), advisers, service providers and third parties who want to learn more about hedge fund due diligence. The structure of hedge funds and their investment management companies require a specific analysis, which differs from regular fund or company research. The course explains the purpose of due diligence, its objectives as well as its various forms. It also examines the several dimensions of due diligence including risk assessment, operations, valuation and administration. Also the affects of Madoff scam will be used to highlight key red flags to spot while conducting due diligence.
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Overview |
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Introduction
Purpose of due diligence: objectives and stages. Who carries out due diligence? Pre-due diligence: objectives, material and timeframe.
Due Diligence Preparation
Gathering of marketing material; funds offering and subscriptions documents; due diligence questionnaire; audited financial statements; performance track record; assets under management by funds and managed accounts; organisational chart; contacts at service providers; funds code of ethics; compliance manual, and annual compliance review; copy of most recent SEC audit with response letter (visit preparation with CFO or COO if applicable).
Main Due Diligence
Project management; on-site and off-site due diligence; due diligence of different strategies (Long/Short, Arbitrage, Global Macro); what are the financial instruments used for in the fund; which regions and markets does the fund invest in; what is the due diligence on small firms vs. large firms; what is the risk profile of the fund?
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Case Study: The Madoff scam and how to spot red flags
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Various Forms of Due Diligence
Due diligence on marketing material, legal and risk reports; desk due diligence: sources and requirements, background checks, verification of the funds track record, compliance tests, biographies of principals and key management; private detectives; informal due diligence.
Risk Assessment, Operations, Valuation, Administration
Due diligence covers several dimensions: risk management of the fund (instruments, exceeding of maximums, tolerance, stop-loss); operations (number of prime brokers, number of trades, IT systems, trade allocation process); valuation (mark to market, frequency of reconciliation, NAV calculation); administration (systems, disaster recovery plan, code of ethics).
Outcome of Due Diligence
Due diligence result, opinion, conclusion; on-going due diligence.
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Exercise: Due diligence meeting with a hedge fund: roleplay
with delegates carrying out the due diligence function.
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Register Now
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