Data Management

How Diligent Is Your Due Diligence?: Anti-Fraud Programmes Are A Risk Management 'Must'

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Executive Summary

Investor trust is important to the success of any investment vehicle, but is particularly key in hedge funds. Hedge funds depend heavily on investor trust, relying on referrals to gain investors and offering relatively limited transparency into their performance and operations. The overarching quest for better-than-market (alpha) returns tends to make hedge fund investors willing to accept the higher risk and limited disclosure inherent in hedge funds. But even for these investors, a cautious policy of "Trust, but verify" may be in order, particularly in the area of fraud risk and prevention.

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