Friday, 23 December 2011

Translations of a Due Diligence Meeting for a Hedge Fund

A well prepared due diligence meeting has a subtext. The following translations will help hedge fund managers understand from where their interrogators (and potential investors) are coming.

Do you have any plans to add any employees? (Do you plan to re-model your house in the near future or are you going to back the growth of your own business?)

How concentrated is the list of your current investors? (We know if GAM pull you are you f****d)
I see you use an external compliance consultant. (I see you think that a small retainer to former FSA staffer can replace a core internal activity of an asset management business)

Is there a particular reason for the risk manager to be located in the annex? (We have spotted how frivolously you treat risk management that is not in your head)

Can you talk me through how you coped with October and November 2008? (What wholesale changes have you made to your risk controls to make sure that disaster zone of a return doesn’t happen again?)

Can I talk to your head of operations about that? (You clearly know nothing about what the back office does)

What was the background for your former partner to leave last year? (Who had the biggest ego between the two founders?)

Who bought the pictures in this meeting room? (Whose taste is THIS?)

These are nice offices and a great location. (This is a big overhead for a small business)

What a friendly dog!  (Having the principal’s name over the door was not just the default choice)

What is your experience of using this system for operations? (I’ve never heard of this supplier)

Can I deal with you directly from here on? (This third part marketer is a piece-of-work)

No comments:

Post a Comment