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Hedge fund manager selection: Why due diligence matters

Hedge fund manager selection: Why due diligence matters

Pages 24 Pages

Selecting hedge fund managers requires balancing performance with risk, transparency, and alignment of interests. Investors must assess strategy fit, track record, liquidity terms, fees, and operational infrastructure. Beyond returns, due diligence focuses on governance, compliance, cybersecurity, and ESG integration, which are now critical differentiators. Quantitative analysis helps compare risk-adjusted performance, while qualitative reviews examine culture, incentives, and decision-making processes. With rising regulatory scrutiny and market volatility, disciplined manager selection is essential to safeguard capital, capture alpha, and build resilient, long-term investment portfolios.

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