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The Monetary Authority warns of operational deficiencies at Singapore hedge funds. At a number of the managers inspected, we observed that there was no proper segregation of duties between the risk management function and the front office functions of portfolio management and trading. Some other points were also criticized. This shows again how important it is in addition to be a great trader to adopt best practice guidelines agreed by the industry. In the end every manager has a fiduciary duty opposite his investors and a due diligence showing adequate procedures will also impress any FOF. My guess is that this does not apply only to Singapore. (Story at HedgeWorld)
(Hedge Fund Working Group Final Report on Best Practice Guidelines)

Speaking about due diligence: Would a thorough investigation have investors helped to avoid being cheated at in the latest hedge fund fraud. The manager has been ordered to pay almost USD 300m, but it is unclear where that money should come from, after it emerged that investors money in Philadelphia Alternative Asset Management has ended in speculation losses of USD 200m and a USD 2m gift for the fund managers girl-friend.
(Story at the FT)

www.HedgeFund-Lawyer.com

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