This Investment News article explains the new level of due diligence that some investors are incorporating in their hedge fund selection process. It is common knowledge that that assets directed toward hedge funds will likely continue to grow, but individual hedge funds will fail. For investors, this is a key point to understand and creating a good request for proposal is a critical step in selecting a hedge fund. The request for proposal process helps investors understand a hedge fund’s history and strategy so that the investors have a better basis for investigating the hedge fund.

The article refers to a recent report which revealed that of the more than 100 hedge funds surveyed half failed because of operational problems. The report’s warning to investors is: “Expanding due-diligence and monitoring practices to understand `back-office’ capabilities can make a big difference in preventing or avoiding these failures.” This article shows that investors are becoming more thorough in the selection process by going beyond a simple background check. Hedge funds may resist greater disclosure to hedge fund investors but in the end the bottom line is that hedge funds need investors and investors are requiring more rigorous request for proposal processes and they are sending out more frequent RFPs overall.

- Richard

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Articles Related to Request for Proposal

1. Hedge Fund Due Diligence
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Tags: Request for Proposal, Requests For Proposal, RFP, Request for Proposal RFP, Request for Proposals, RFPS

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