Hedge Fund Operational Due Diligence: An Absolute Best Practice or Floating Standard?
Corgentum Consulting has released a new research piece which discusses the pros and cons of applying absolute best practice and floating standards towards hedge fund operational due diligence.
This paper outlines, the benefits to investors of developing and maintaining competency of global operational risk trends. While an absolute best practice standard facilitates uniformity in comparing operational risk information, this methodology can suffer from rigidity.
A floating standard can better accommodate the particularities of hedge funds operating in different regions but runs the risk of being overly flexible.
Hedge Fund Operatinal Due Diligence: An Absolute or Floating Standard? can be found in the Research section of the www.corgentum.com website, or via direct link here .
Amaranth and Hedge Fund Regulation: A Historical Perspective
A video from June 2007 which provides a nice perspective on the fall of Amaranth Advisors, Long Term Capital Management, the growth of hedge funds from underfunded pensions, the role of quants, and hedge fund regulation. Includes interviews with former SEC Chairman (turned Columbia Law School Professor) Harvey Goldschmid, Nassim Taleb (of Fooled by Randomness and Black Swan fame). It is even more interesting to watch this in light of impending financial regulatory reforms:
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:
|
|
||||
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)
