Hedge Fund Investment Due Diligence Process Review

January 16, 2023

Following revelations that it had been defrauded in a Ponzi scheme with exposure of over $80 million, a major hedge fund requested a comprehensive review of its investment due diligence processes including its use of investigative due diligence of potential investment deals.   The project consisted of a detailed review of the entities and individuals through whom the fund had invested, prior investigative due diligence performed, its sufficiency, how the fund responded when there were adverse findings and the extent to which these reports factored into their overall investment decision.  Upon the issuance of our report, the fund made numerous changes to its investment due diligence processes and investment governance.