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Recent scandals such as “Madoff” and “Stanford International Bank” highlight the importance of a more advanced Fund Due Diligence framework, notably in terms of qualitative Due diligence. The non-robustness of many Hedge Funds to shocks following the subprime crisis also warrants the development of a robust quantitative Due Diligence approach. Quantitative benchmarking techniques would also have permitted to detect the anomalous performances generated by some funds. Due diligence is typically implemented along two dimensions: quantitative Due Diligence and qualitative Due Diligence. Quantitative Due Diligence involves model building, validation and valuation services.
Qualitative Due Diligence can be implemented through the analysis of direct operational Fund risks and...
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