I conducted due-diligence on nine hedge fund managers in New York with my colleagues and analysts at Albournce from April 23, 2011 to April 30, 2011. I wrote a full report about it, which obvisouly I am not allowed to share with here. Probably listing up questions in that report would be the best I can do to give you sense of my work.
Relevant working experience: January 2010 to February 2013 as a risk manager at Korea Investment Management (Seoul, KR)
- Is NAV pricing calculated by an independent fund service?
- What is your internal process when discrepency occurs in NAV pricing between your firm and the independent fund service?
- Historical records of re-announcing NAVs.
- According to Stephen Brown(2011), 10% of hedge fund managers in average modifies a portfolio NAV at least once.
- The number of signatures required to complete money transactions.
- According to Stephen Brown(2011), an average of 1.7 signatures is needed.
- Limitation of receipiant imposed
- Existance of the 3rd-party reviewing money transactions
- General information such as prime brokers, auditors, undisclosed investment activies in feeder funds (rather than mother funds) and etc.
- A turnover ratio
- Is your auditor one of Big 4?
- History of changing prime brokers, auditors and custodian banks.
- Your definition of leverage
- Limits on leverage
- How to leverage (Creditline? Colateral? Derivatives?)
- Limits on loans
- Risk limits (on single positions, concentrations, country or sector levels and etc).