Focus on Operational Risk and Due Diligence: Corgentum Discusses Operational Risk with HFMWeek
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.
Corgentum Releases Guide To Understanding Your Hedge Fund’s Approach to Prime Brokerage
Corgentum Consulting has released a new guide providing an overview to hedge fund’s approaches to prime brokerage. This paper provides an overview of the operational risk and challenges which prime brokerage presents hedge funds.
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.
Corgentum outlines the importance of recognizing a hedge fund’s operational stengths and weaknesses with Risk.net’s Operational Risk & Regulation Journal
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).
