Guest Contributors

Deborah PrutzmanOn January 31, the SEC held an all-day conference to deliver a clear message: CEOs and senior management will be held responsible for creating, managing, and maintaining an effective control environment. Deborah Prutzman, CEO of The Regulatory Fundamentals Group, says that it is critical for asset managers to honestly assess the risks facing their firms and evaluate whether their business processes are sufficiently robust to protect investors, employees and their firms.

By Bruce Frumerman, Frumerman & Nemeth Inc. -- It’s one thing when people who are not part of the hedge fund investor universe say hedge funds are money management firms that reveal too little about themselves. It’s another thing entirely when those folks investing in hedge funds are complaining about this.

By Patrick J. McCurdy, Merlin Securities -- The investor due diligence process has evolved with the growth of the hedge fund industry. What was once a short and rather perfunctory process has grown into one which today is highly quantitative and detailed. While there is no one-size-fits-all formula for investors, one certainty is that managers who understand the components of the due diligence process will have an easier time meeting the requests of investors.

By Alan J. Andreini, Brencourt Advisors -- Ten years ago, a hedge fund’s stellar track record would overshadow investors’ worries about the fund’s everyday operations. Those days are gone. Today, all hedge fund managers who seek the large and stable institutional allocations must understand what it takes to assemble and operate an infrastructure that will pass examination under today’s new operational due diligence microscope.

By Diane Harrison, Panegyric Marketing -- Enough already with the endless discussions about how hard it is to raise money in these “challenging markets” with “increased regulatory pressures” and “correlation convergence.” Whoever said it was easy to stand out and succeed in this cutthroat alternative environment? If you’re an established player, you are likely coasting on your past performance returns and maintaining a substantial asset base, or you’re outperforming and generating real interest in what you offer now to those with capital to invest. That’s great, once you’ve arrived, but that doesn’t mean there isn’t room for true talent to rise to the occasion and find success as well.

Deborah PrutzmanBy Deborah Prutzman, CEO, The Regulatory Fundamentals Group -- “How can I focus on managing investments (and growing my fund) when I have to be concerned with an all-consuming regulatory environment?” Managers of hedge funds, private equity funds, commercial real estate funds, and fund of funds are all asking themselves this question. This article highlights the key legal and regulatory issues a manager needs to understand so that he can streamline his business processes and focus on what he does best—managing investments and increasing returns.

By Phillip Niles, Butterfield Fulcrum -- The alternative investments world was shocked again recently by the sudden collapse of MF Global, Jon Corzine’s broker/dealer and clearing firm, brought down by bad bets in Europe. Even more damaging has been the revelation by the Commodity Futures Trading Commission that around $600 million is flat-out missing from segregated accounts at MF Global, which represents approximately 11% of the total segregated account balances at the firm.

By Mary Beth Hamilton, Eze Castle Integration -- Cloud computing is gaining popularity within the alternative investment space as firms look to capitalize on the efficiencies, resiliency and cost advantages cloud-based services can deliver. From application hosting to delivering a firm’s complete information technology infrastructure via the cloud, this technology delivery model is here to stay.

Michael BeattieBy Michael Beattie, Tradex Global Advisors --  Smaller, niche hedge fund managers, when properly researched, investigated and understood, generally outperform their larger counterparts and the overall hedge fund universe.

David SmithBy David Smith, GAM Multi-Manager -- The fund of hedge fund industry has faced intense pressure in recent months as pension fund managers look to reduce portfolio costs. Bypassing these specialist managers in favor of directly investing in hedge funds can seem an appealing way to economize. However, the reality is often fraught with operational challenges and risks, leading many to the conclusion that the process is best left to the fund of hedge fund experts.