At the panel sessions, it is anticipated that Mr. Scharfman will focus the discussion on upcoming trends in operational risk in alternative investments including hedge funds and private equity funds. Other topics which are anticipated to be discussed include the role of operational due diligence consultants such as Corgentum in designing a comprehensive operational due diligence solution, and operational due diligence challenges institutional investors can expect in 2012.

The panel Mr. Scharfman will moderate will be entitled, “Investing in Alternatives” and will take place on Wednesday February 15, 2012 at the Astor Crowne Plaza in New Orleans, LA.

To register for the event here, please visit the conference website.

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The panel will be entitled, “Hedge Fund Opportunities” will take place on Friday March 2, 2012 at the Crowne Plaza Times Square in New York, NY.

It is anticipated that Mr. Scharfman will discuss evolving trends in hedge fund operational due diligence for 2012, the benefit to investors towards working with operational due diligence consultants such as Corgentum, and the benefits of incorporating risk considerations into the hedge fund portfolio construction process.

To register for the event here, please click here.

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A jury recently handed down a sentence which found that the Galleon Group’s founder Raj Rajaratnam was convicted of insider trading. Bloomberg is reporting that jury never argued during 12 days of secret deliberations that he was innocent.  Instead the focus was on what sentence to give Rajaratnam. Here is a post about the Galleon verdict entitled, Galleon’s Fait Accompli : Investor’s Move the Dial Towards a Conservative Approach to Hedge Fund Research, on the Corgentum Consulting blog and some videos from the trail and verdict:

http://youtu.be/YKbqdE_BA5w

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The article is entitled, “Protection Racket – Investors rely on independent administrators like Citco to okay hedge fund books. But who’s watching these bookkeepers?” .

The article features Corgentum Consulting Managing Partner, Jason Scharfman discussing the role of hedge fund administrators in the investor operational due diligence process. Mr. Scharfman says, “ Part of the reason big-name administrators are winning more hedge fund assets is that they offer a false appearance of comfort and illusions of due diligence. Investors are still very much on their own in the hedge fund arena, ” says Mr. Scharfman.

The full article can be read on Forbes.com , in print editions of Forbes magazine for the week of April 25, 2011 or via direct link.

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A new article this week in HFMWeek focuses on operational risk and operational due diligence in hedge funds. Corgentum Consulting Managing Partner, Jason Scharfman is featured this week in the article.

In the article, which is entitled “Focus on Operational Risk” Mr. Scharfman discusses the enhanced focus which investors and hedge funds have placed on operational risk management and operational due diligence in the aftermath of the financial crisis.

Mr. Scharfman also cites Corgentum’s proprietary research which demonstrates an increasing trend that managers with weaker operational infrastructures demonstrate lower performance as opposed to those with stronger operations. Other key operational risk considerations outlined by Mr. Scharfman in the article include:

• The presence of conflicts of interest related to providing operational due diligence services to both hedge funds and investors
• The dangers of over reliance on hedge fund regulation to supplant investor’s own due diligence efforts
• Ways in which investors can benefit from having an independent third party consultant such as Corgentum assisting with operational due diligence reviews
• The benefits to a hedge fund’s operations of proper internal resource allocation and management oversight

The article can be found in print editions of HFMWeek at HFMWeek.com, or via direct link.

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Corgentum Consulting

Understanding Your Hedge Fund’s Approach To Prime Brokerage also discusses investor operational due diligence considerations for utilizing multiple prime brokers, the role of introducting prime brokers and bundled prime brokerage services.

The paper can be found in the Research section of the corgentum.com website, or via direct link here.

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The recent comments of Jason Scharfman, Corgentum Consulting Managing Partner regarding the enhanced focus being placed by investors on hedge fund operational risk were outlined in Risk.net’s Operational Risk & Regulation Journal in an article entitled, Operational infrastructure at hedge funds comes under closer scrutiny .

Topics outlined by Mr. Scharfman in the article include:

• Continued failures of many hedge fund with in regards to documenting operational policies
• Benefits of hedge funds emphasizing their operational strengths and openly discussing operational weaknesses
• The false artifical operational floor of Dodd-Frank legislation
• Inherent benefits of investors develop dialogues concerning operational risks with their hedge fund managers

The full article can be read on the Risk.net’s Operational Risk & Regulation website (subscription required).

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A recent Opalesque article outlined the recet the comments of Jason Scharfman, Corgentum Consulting Managing Partner on the subject of trends in hedge fund operational risk.

In the article, which is entitled 20% of marketing presentation should be dedicated to investor education , Mr. Scharfman outlines in part that, “[managers] need to have a robust operational policy (from pricing sources, to valuations, to how the administrator receives that information, to cash management policies).”

The full article can be read on the Opalesque website (subscription required).

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Corgentum Consulting has released a new paper entitled, Hedge Fund Operational Due Diligence Education Series – Understanding Material Nonpublic Information in the United States.

With the recent raids of the offices of three hedge fund managers by the Federal Bureau of Investigation and the on-going prosecution of Raj Rajaratnam’s Galleon Group, cracking down on allegedly illegal insider trading is clearly on the forefront of the U.S. government’s financial regulatory agenda. Here is a video from CNBC concerning the recent FBI raids:

Hedge Fund Operational Due Diligence Education Series – Understanding Material Nonpublic Information in the United States provides an introduction to the ways in which hedge fund’s may interact, either directly or indirectly, with material nonpublic information. Areas addressed in this paper include a hedge fund’s use of expert networks as well as other third-party firms which provide information to hedge funds. Also discussed in this paper are several questions investors should address during the operational due diligence process in order to diagnose both a fund’s potential exposures to the risks associated with material nonpublic information as well as what preventative measures, if any, a hedge fund may have taken to insulate themselves for the liability associated with receiving or trading on such information.

The paper can be found in the Research section of the corgentum.com website, or via direct link here.

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Specifically, hedge funds with at least $150 million in assets will be required to register with the SEC. As a reminder hedge funds were previously required to register with the SEC but that requirement was lifted after Philip Goldstein sued the SEC (and won) in 2006 to lift the registration ban – here is the decision. Despite the Goldstein rule the hedge fund industry, via groups such as the Managed Funds Association, have expressed support for hedge fund registration: