Due Diligence, Distress, Madoff, Stress Scenarios, and Liquidity
Free GARP FRM Part II lesson in Risk Management and Investment Management. 23 min read, ~3,421 words.
Hedge fund DD spans investment process, operations, business model, and fraud risk. Operational due diligence (ODD) catches what investment DD misses, and operational failures dominate hedge fund losses. ODD checkpoints: weak auditor, self-custody, weak segregation of duties, low GP capital. Any single failure outweighs a strong track record. Distress symptoms...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
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