More Operational Due Diligence Job Postings: The Market Continues to Grow
This post is a follow up from a previous post in which I listed several new operational due diligence positions which have been posted. Despite the current state of the economy the number of firms hiring operational due diligence positions has continued to increase. Some trends in these job postings of note:
1) the demand for operational due diligence seems to be global in nature (i.e. – USA, Asia and Europe);
2) direct hedge fund operational due diligence experience is (foolishly) not always required, but rather an industry qualification is sufficient in some cases;
3) based on some job descriptions it is clear that certain operational due diligence functions will be understaffed to performed a thorough operational due diligence review;
4) In certain other cases, the operational due diligence position may be part of a larger role which will require the operational due diligence analyst to both perform due diligence and oversee other internal operational processes
In short, based on the continued apparent misperception among certain hedge fund allocation groups as to the time and effort required to perform operational due diligence, I would highly encourage all those seeking an operational due diligence role to perform some sort of due diligence on your potential employer to ensure they actually understand the appropriate effort required to thoroughly perform operational due diligence on a hedge fund. If not, an under resourced and overworked operational due diligence analyst may find themselves serving as a scapegoat in the event a hedge fund failure occurs (a fund which they may not have had the opportunity to thoroughly vet). Here’s a video about scapegoating:
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Some recent links to some operational due diligence jobs are posted below. As I stated in the previous post, I do not know if these positions have been filled and I do not vouch for or endorse any of these positions. Now with all of this hokum out of the way I thought this list might be of interest to some of this website’s readers:
Operational Due Diligence Researcher (Seattle, Washington, USA)
Hedge Fund Due Diligence Analyst (New York, New York, USA)
Operational Due Diligence Associate (New York, New York, USA)
Director, Operational Due Diligence (New York, New York, USA)
Operational Due Diligence Analyst (London, United Kingdom)
Head of Operational Due Diligence (United Arab Emirates)
Marc Dreier: The Swindler
Here is an excellent video about disgraced attorney and hedge fund fraudster Marc Dreier from CBS 60 Minutes. This 
piece was Mr. Dreier’s first TV appearance. In it it he described how he fabricated documents, lied about relationships with former clients, used former clients (Kosta Kovachev) to impersonate people and dug himself into a $400 million Ponzi hole which as he describes, “he couldn’t get out of.”
It’s worth noting that in a separate case, Kovachev in 2006 was ordered to pay $350,000 in a civil suit brought by the U.S. Securities and Exchange Commission accusing him and 11 others of defrauding more than 600 investors of more than $28 million in a Ponzi scheme. The SEC said that Kovachev and others sold unregistered securities structured as hotel timeshare rental interests.
Mr. Dreier was a graduate of Yale as well as Harvard Law School. He previously ran Dreier LLP which had offices in five cities, employed over 250 lawyers and annual revenues of over $90 million. the firm’s client’s included Bill Cosby, Andy Pettitte and Justin Timberlake. The firm is now defunct.
Notable quotes from the video, which investors might want to keep in the back of their mind during the operational due diligence process include:
“The more money you look for the fewer questions people ask sometimes.”
“It was clear to me the more you showed people you didn’t need money, the easier it was to attract money”
“A $20 million dollar mistake had grown into a $100 million mistake”
“Do I have chutzpah? Yes!”
He further goes onto describe part of the reason he finally was caught was that a potential investor, who was attempting to defraud, had acted diligently and made some phone calls (i.e. – performed due diligence) which had raised his suspicions. If that isn’t an endorsement for operational due diligence I don’t know what is.
The video describes how Dreier lived a lavish lifestyle to create the illusion that he already was a billionaire before his empire crumbled. Some of his assets included an $11 million ocean front compound in the Hamptons, his $10.5 million apartment, an art collection that included a Picasso, three Matisse’s and 12 Warhol’s. Also just like Madoff, Dreier had a yacht. His was a 120 foot yacht called “Seascape” staffed by a full-time crew of 10, which Dreier paid $18 million for.
The video also describes how Dreier tried to further add an air of credibility to his persona by hosting charity events with former New York Giants (American football) player turned actor Michael Strahan, which were attended by such celebrities as Diana Ross, Jon Bon Jovi, Alicia Keys and William Shatner.
Dreier is serving 20 years at a Federal Correctional Institution in Sandstone, Minnesota. He is scheduled for release on October 26, 2026.
Hedge Fund Operational Risk and Due Diligence Class at New York University
Corgentum Consutling Managing Partner Jason Scharfman, will be teaching a course at New York University on the subjects of hedge fund operational risk and due diligence. This course, which is applicable towards NYU’s Certificate in Financial Risk Management will run for eight sessions beginning on Wednesday May 26, 2010. The course description is outlined below:
Establish a solid understanding of the essential techniques required to perform legal, regulatory, back office investment, and operational due diligence on hedge funds and other alternative investments. Topics include an overview of fund legal and financial documentation, valuation and custody assessment, asset verification techniques, common red flags, fraud case studies, and fund interview strategies. The course is designed for attorneys, auditors, investment analysts, legal and compliance professionals, and investor relations and marketing professionals interested in developing a comprehensive understanding of alternative investment due diligence techniques and issues.
For more information or to enroll in this course please visit the course details homepage.
