| June 23, 2016
Disclaimer: I am not a lawyer. These are just general observations from my non-lawyerly experience. For actual legal advice you should consult your counsel; ironically the same counsel that I will now suggest could be sucking blood out of your organization like a tsetse fly. But either way, don’t listen to me and listen to your lawyer (or a lawyer) instead.
| December 28, 2015
There are a lot of things to look out for when doing manager check-ins, but here are the 15 most critical points to keep track of.
| September 3, 2015
Shkreli trying on his new matching Tiffany’s bracelets
If infamous ‘pharma bro’ Martin Shkreli’s public statements since his arrest are any indication, he is likely to wage a trial by public opinion over the next several months.
Shkreli has already called his indictment a witch-hunt based on his much-hated move of jacking up drug prices rather than based on any legal wrongdoing. There seems to be some sympathy for this angle, and I wouldn’t be surprised to see upcoming pieces profiling his ‘introverted and misunderstood’ personality over the coming weeks. The talking heads have already begun to debate whether his unethical behavior with regarding to drug pricing merits the “response” by authorities.
| September 3, 2015
Everyone knows that a “fund of fees” has to overcome a high bar to justify it’s expenses (typically a 1% management & 10% incentive fee) but here are several other key problems that affect most fund of funds (FoF) investors and every individual investor in hedge funds alike:
| August 23, 2015
Just as filing a Freedom of Information Act (FOIA) Request can be quick and easy (read more on using FOIA here), regulator databases provide immediate key information:
| August 17, 2015
There are several objectives to hedge fund DD (and it’s not all about making sure the manager isn’t a Madoff.) It helps to recognize from the outset that each hedge fund is first and foremost a business, and for businesses to be successful, they need to have a differentiated product, and a repeatable process for creating that product. In other words, what is the manager’s differentiating ‘edge’, what is their process for exploiting that edge, (and how does it fit into your portfolio)?
| June 24, 2015
A rogue trader is a trader who risks extreme amounts of firm capital without authorization and then loses it. (Conversely, a rogue trader who MAKES billions is called a “managing director.”) Rogue trading happens when poorly designed incentives are coupled with weak operational controls. Before getting into the risk this presents to your hedge fund investments, let’s review history.
The cornerstone of hedge fund investing is due-diligence. Over the years investors have missed blatant red flags that are obvious to experienced hedge fund investors. Apply these 8 tips to your due-diligence process to help sort through the weeds and avoid potentially fatal losses: