Some of the other questions you should consider, according to "Selecting Single-Manager Hedge Funds for Private Client Advisers" by Richard Boutland, include:
- For a non-U.S. fund, who is the fund administrator and how extensive is their role? Boutland prefers strong, involved administrators.
- Is the fund managed in a country with a strong regulator?
- Does the fund manager have adequate operations expertise and adequate capital? Boutland notes that "on many occasions 'star traders' have set up their own firms only to fail through lack of adequate information technology, compliance, trade support, personnel, investor relations, and all of the other operational support."
- Are there special terms for other investors that discriminate against redemptions by new investors?
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Susan B. Weiner, CFA
Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.
Copyright 2008 by Susan B. Weiner All rights reserved
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