In their November 21, 2005 issue Business Week has a long-form article on hedge fund due dilligence, recounting many of the familiar horror stories of the last few weeks. While there is nothing earth shattering to learn in the piece, it is worth a read for some insights into the process of investigation as well as for some first pre-investigative steps that clients can undetake before bringing in an investigator for a more thorough check. The message is simple, doing your homework pays off. Spend a little to save a lot. Here's the lead:

Hedge Fund Sleuths

November 21, 2005
Business Week

"For sizable fees, they put secretive investment partnerships under a microscope"

The recent high-profile blowups of two hedge funds, Bayou Management and Wood River Capital Management, have raised an important question: What can hedge fund investors do to avoid getting burned by unscrupulous managers? The answer: Quite a bit, as long as you're willing to spend time or money vetting these investments...

Read on, here....or save time and just give Caveat a call.

-- MDT

Labels: Bayou Group, John Whittier, Wood River Capital