News
May 17, 2012
Corgentum To Host Webinar: Effective Techniques for Evaluating Fund Service Providers and Counterparties on Thursday, June 14th from 10:30-11:30am EST
Join us for the next installment in Corgentum's Operational Due Diligence Webinar Series!
The next webinar, Hedge Fund Operational Due Diligence Deep Dives: Effective Techniques for Evaluating Fund Service Providers and Counterparties , will take place on June 14th from 10:30-11:30am EST. This webinar will focus on techniques for evaluating fund service providers and counterparties and will feature speakers, Jason Scharfman, Managing Partner of Corgentum Consulting and Scott Price, Vice President of Custom House Group.
Topics to be discussed include:
- The increasing role that hedge fund service providers play in fund operations
- Recent service proider trends
- How to work with administrators, auditors, prime brokers and ISDA counterparties during the operational due diligence process
- Critical techniques investors can use to evaluate service provider related risks in hedge funds
To register for this webinar, click here!
May 15, 2012
Corgentum Outlines the Risks of Form ADV Disclosures with Institutional Investors
Corgentum Consulting Managing Partner, Jason Scharfman has written an op-ed piece for Institutional Investor entitled, “New Fund SEC ADV Disclosures: A Wolf in Sheep’s Clothing?” This piece discusses the challenge investors face in balancing fund transparency with mandatory regulatory disclosures.
The SEC is now requiring fund managers to report more information by revising Form ADV disclosures. The article urges investors to be aware of the fact that just because the SEC might require more information from funds, this does not mean that there is as much quality in the documents as there is quantity. Mr. Scharfman makes it clear that it is still important to perform operational due diligence regardless of changes made to ADV disclosures and the yellow flags to look for when doing so.
Click here to read the full article.
May 10, 2012
Corgentum sits down with ValueWalk to Discuss Trends in Private Equity Operational Due Diligence
Corgentum Consulting recently sat down with ValueWalk to discuss trends in the private equity industry and the growth of operational due diligence among Limited Partners.
In the interview, Corgentum Consulting Managing Partner Jason Scharfman also discusses his new book, Private Equity Operational Due Diligence: Tools to Evaluate Liquidity, Valuation and Documentation.
Other topics covered in the interview include:
- Trends in operational due diligence for LP's
- LP considerations in evaluating GP valuation approaches
- Evolving trends in GP operational best practices
- Historical example of private equity fraud
May 9, 2012
Corgentum's Scharfman to Teach Class at New York University on Operational Due Diligence
It has been announced that Corgentum Consulting Managing Partner Jason Scharfman, will be teaching a course at New York University on the subjects of hedge fund operational risk and due diligence. This course, is applicable towards NYU's Certificate in Financial Risk Management, as well the school's Certificate in Ethics and Corporate Governance . The class is titled, Hedge Fund Operation Risk and Due Diligence and will run for eight sessions beginning on June 6, 2012. The course description is outlined below:
Establish a solid understanding of the essential techniques required to perform legal, regulatory, back office investment, and operational due diligence on hedge funds and other alternative investments. Topics include an overview of fund legal and financial documentation, valuation and custody assessment, asset verification techniques, common red flags, fraud case studies, and fund interview strategies. The course is designed for attorneys, auditors, investment analysts, legal and compliance professionals, and investor relations and marketing professionals interested in increasing their knowledge of alternative investment due diligence techniques and issues.
For more information or to enroll in this course please visit the course details homepage.
May 2, 2012
Corgentum's Managing Partner, Jason Scharfman will Teach a Class: "Surviving a Hedge Fund Operational Due Diligence Audit" in NYC
Corgentum Consulting’s Managing Partner, Jason Scharfman will teach a class created specifically for hedge fund managers to help them be better prepared for an operational due diligence review. The class is entitled, "Surviving a Hedge Fund Operational Due Diligence Audit" hosted by the Financial Technologies Forum and will cover everything from what to expect during an on-site visit, to the documents that operational due diligence consultants may expect managers to have on-hand during the review process. The course will be held from on June 12 from 8:30am-4:30pm in New York City at the Bayards.
Key topics to be covered during this full day event include:
- What is operational due diligence?
- Why investors think operational due diligence is important
- Investor operational due diligence approaches
- Managing fund service provider communications, among several others
Sign up to attend by clicking the link provided: "Surviving a Hedge Fund Operational Due Diligence Audit."
April 25, 2012
Corgentum Discusses the Growth of Operational Risk with Opalesque
Corgentum Consulting recently sat down with Opalesque to discuss the growth of the operational due diligence industry.
In the article, Operational due diligence firms grow as investors seek to manage risk, Corgentum Consulting Managing Partner Jason Scharfman outlines how investors' increasing demands for independent operational due diligence reviews, such as those provided by Corgentum, have fueled the continued growth of the industry. He says in part, "There is a market for institutional level operational review even for smaller allocators. Investors are recognizing that they have to maintain at least a minimum standard of due diligence."
Discussing the impact of recent regulatory changes on hedge fund compliance infrastructures, Mr. Scharfman states, "Investors are more aware of what the risk information means, and are demanding more of managers. A lot of funds didn’t have a dedicated compliance officer or a full compliance team and you’re seeing them build out that infrastructure."
The Opaleseque article also highlights the benefits of Corgentum's independent multi-disciplinary approach towards operational due diligence. "If you have a legal firm doing the review, they’re going to tell you if something is legal, side pockets are legal, thinly sourced valuations are legal, but that doesn’t always mean they are advisable from a risk perspective. This is also true for key man risk, and business continuity," say Scharfman.
In the article, Mr. Scharfman also highlights the drawbacks of relying on operational due diligence questionnaires and how Corgentum incorporates operational benchmarking into the fund review process.
The Opalesque article, Operational due diligence firms grow as investors seek to manage risk is available on the Opalesque website .
April 20, 2012
Corgentum's Operational Due Diligence Webinar Series Featured in the Hedge Fund Law Report
Corgentum Consulting's operational due diligence webinar series continues to fuel the discussion surrounding investor operational due diligence challenges and trends.
The inaugural webinar in the series entitled, Operational Due Diligence Survival Kit for 2012: Essential skills for uncovering and evaluating operational risk in hedge funds, private equity and traditional funds. was recently covered by the Hedge Fund Law Report . The article entitled, "Corgentum Webinar Highlights Trends, Challenges and Best Practices for Hedge Fund Investors in Conducting Operational Due Diligence" outlines the key points covered in the webinar including the importance of defining the key elements of an investor's operational due diligence process and developing a plan of action based on new market challenges. The Hedge Fund Law Report article can be read on the Hedge Fund Law Report website (subscription required) in Vol. 5, No. 16 (Apr. 19, 2012).
Additionally, Corgentum has recently posted a replay of the webinar on the Videos section of Corgentum.com. .
To be alerted of upcoming webinars in the Corgentum series please sign up for our Corgentum news via our Contact page.
April 11, 2012
Corgentum Discusses Operational Due Diligence Survey and LP Trends With PE MANAGER
As a recent Corgentum Consulting survey indicates, a trend is developing where more private equity Limited Partners are beginning to focus increased attention towards operational due diligence.
Corgentum Managing Partner Jason Scharfman recently spoke with PE MANAGER regarding the Corgentum survey, Private Equity Operational Due Diligence Trends - Navigating the Path Forward , and the state of Limited Partner operational due diligence in general.
In the PE MANAGER article , which is entitled, PE Manager: LPs back office inspection set to rise , Mr. Scharfman states, " Institutional investors exhibit a post-Madoff type mentality where tougher questions are being asked around fund operations; the kicker being better relations for those GPs able to pass their expectations."The Corgentum study is available in the Research section of the Corgentum.com website, or via direct link here.
The PE MANAGER article, LPs back office inspection set to rise is available on the PE Manager website (subscription required).April 10, 2012
Corgentum Issues Press Release To Announce Official Release of Private Equity Operational Due Diligence Book
Today is the official launch of Corgentum Consulting Managing Partner Jason Scharfman's new book Private Equity Operational Due Diligence: Tools to Evaluate Liquidity, Valuation and Documentation.
To commemorate this event Corgentum has issued a press release announcing the book launch.
It is available on PRWeb here or on Corgentum.com here.
April 9, 2012
Corgentum's Private Equity Operational Due Diligence Trends Study Featured in Opalesque
Corgentum Consulting has released a new study focused on operational due diligence trends among private equity investors.
The study, Private Equity Operational Due Diligence Trends - Navigating the Path Forward has been featured in an exclusive article by Opalesque. The Opalesque article is entitled, "Due diligence consulting firm calls for more checks on private equity funds, not just hedge funds. "
The Corgentum study and Opalesque article come in advance of the official release of Corgentum Consulting Managing Partner Jason Scharfman's new book entitled, Private Equity Operational Due Diligence: Tools to Evaluate Liquidity, Valuation and Documentation. For the study Corgentum surveyed approximately 150 Limited Partners in order to gauge trends in operational due diligence on private equity.
The Opalesque article highlights many key points of the Corgentum survey including:
- 87% of the survey respondents perform some kind of operational due diligence on fund managers
- 84% of respondents think hedge funds have more operational risks, as compared to private equity
- 24% of the investors who conduct operational due diligence use consultants, and many of the latter also provide investment advice.
- 74% of Limited Partners said they only perform operational due diligence on hedge funds and not yet on private equity
In the article Mr. Scharfman states, “ This study shows that private equity investors have not yet moved beyond Madoff, and are still lagging behind their hedge fund counterparts in the resources they are dedicated towards performing operational due diligence. The good news is that the data shows that Limited Partners are turning the corner and starting to realize that poor private equity operations can be just as harmful as poor investment performance. With solid operational due diligence and developing dialogues about operations with General Partners, LP's can avoid unnecessary operational risks and generate better returns.”
The full Corgentum study is available in the Research section of the Corgentum.com website, or via direct link here.
March 28, 2012
Corgentum Consulting Quoted in Waters Technology Piece, "Undue Diligence"
Corgentum Consulting has been featured in an article for Waters Technology entitled, “Undue Diligence”, written by Anthony Malakian. This article discusses the importance of operational due diligence. Malakian points out that when operational due diligence does not occur, situations like AIJ or the recent, entirely made-up fund, Market Neutral Trading can happen, causing investors to lose millions of dollars.
Mr. Scharfman is quoted in the piece explaining how Japan’s regulatory structure is a bit behind the United States and Europe.“The Securities and Exchange Surveillance Commission (SESC) hasn’t accused AIJ of any wrongdoing, but that will change if it’s proven that AIJ hid funds overseas in the Cayman Islands. And it should be noted that Japan’s regulatory structure is only now catching up to those of the US and Europe.”
Mr. Scharfman also points out:
“Japanese investors, culturally, have been less inclined to put the screws to fund managers,” he says. “In other regions, post-Madoff, investors have realized that they have to look past any cultural hang-ups or not wanting to embarrass somebody or not be forward and ask certain questions. Japan has been behind the curve a little bit and they’re only now catching up.”
Furthermore, this article raises other due diligence issues pertaining to technology. Now, more than ever, investors are looking for specific documents from fund managers as a means to diving deep on the due diligence process. Mr. Scharfman was also quoted saying, “People are struggling with what to do with all the documents they receive when conducting due diligence and then how they analyze those documents. The solution will come down to how to organize and mine data that is generated in the due diligence process.”
To read the entire article, click here (subscription required).
March 27, 2012
Corgentum Discusses Due Diligence Techniques for Success with TABBForum
Corgentum Consulting’s, Jason Scharfman’s article, “Due Diligence Techniques for Success: Why Fund Managers Try to Manipulate Due Diligence," was featured on TabbForum, a news and opinion hub for the financial industry.
In this article, Mr.Scharfman discusses the importance of transparency between fund managers and clients. He explains how in situations like the AIJ scandal, fund managers would not even allow investors to perform any type of due diligence and that this is a red flag for investors.Investors who are new to the due diligence process are often hesitant to ask tough questions of the fund managers, however they should take control of the process. The main goal of due diligence is to avoid risk. By performing due diligence correctly, investors can insure that they are investing their capital with the right manager.
To read the full article click here (subscription required).
March 22, 2012
Corgentum Speaks with Bloomberg on Operational Due Diligence Failures in Japan AIJ Pension Case
The recent announcement of the millions of dollars in potentially missing pension fund assets at Japanese fund manager AIJ, has focused the spot light on the importance of the need for investors to perform consistent and comprehensive operational due diligence.
Corgentum Consulting Managing Partner Jason Scharfman, recently spoke with Bloomberg regarding the role operational due diligence played in the AIJ crisis. Mr. Scharfman's comments are featured in an article by Tomoko Yamazaki and Komaki Ito entitled, " AIJ Beckoned Japan Pensions With 50-Year-Old Return Targets."
Commenting on the importance of applying a consistent operational due diligence process regardless of the potential attractiveness of an investment opportunity Mr. Scharfman states in the article, “In the case of AIJ, underfunded Japanese pension funds seemed to have placed profits ahead of common sense.”
Mr. Scharfman also addresses a key role pension fund manager's should play in overseeing assets, “The job of pension fund managers is to exercise due diligence and protect assets, not simply chase high returns.”
The full article is available on Bloomberg website or via direct link here.
March 21, 2012
Corgentum to Moderate Private Equity Panel at Emerging Managers Conference
Jason Scharfman, Corgentum Consulting Managing Partner and author of the forthcoming Private Equity Operational Due Diligence: Tools to Evaluate Liquidity, Valuation and Documentation will moderate the private equity panel at Opal's Emerging Managers Conference. The panel will take place on Thursday May 31 at 8:30am at the The Radisson Blu Aqua Hotel Chicago in Chicago, IL. Mr. Scharfman is anticipated to discuss a number of topics related to operational due diligence on this panel including:
- Techniques for performing operational due diligence on emerging managers
- The unique operational risks presented by emerging private equity managers
- Ways in which Limited Partners can effectively communicate operational due diligence concerns to General Partners
It is also anticipated that this panel will also cover several topics included in Scharfman’s upcoming book, Private Equity Operational Due Diligence: Tools for Evaluating Liquidity, Valuation and Documentation.
To sign up for the conference, click here
March 16, 2012
Due Diligence Lessons from the Goldman Sachs Resignation Letter - Corgentum's Scharfman Writes Op-ed for Pension & Investments
The recent scathing resignation letter of former Goldman Sachs Executive Director Greg Smith has received a great deal of media attention. Mr. Smith's letter also contains a number of lessons for investors about operational due diligence. In particular, as Mr. Smith's letter highlights, analyzing the organizational culture of a fund manager is a part of the operational due diligence process that can provide investors with a number of meaningful insights. Unfortunately, this key part of the due diligence process can often go overlooked.
Corgentum Consulting Managing Partner Jason Scharfman has written an op-ed piece entitled, "Due diligence lessons from the Goldman Sachs resignation letter," for Pensions and Investments outlining some of the due diligence lessons investor's can learn from Mr. Smith's resignation letter including the importance of analyzing a fund's manager's corporate culture during the operational due diligence process. Mr. Scharfman's article also discusses how analyzing a fund manager's organizational culture can:
- provide cues into operational efficiency
- assist investors in identifying conflicts of interest
- detect meta risks, such as problems in organizational culture, that may lead to future operational issues
March 9 , 2012
Corgentum's March 15 Webinar is Fast Approaching - Register Today!
Corgentum's inagural operational due diligence webinar is fast approaching!
The webinar, Operational Due Diligence Survival Kit for 2012: Essential skills for uncovering and evaluating operational risk in hedge funds, private equity and traditional funds will take place on March 15 from 2-3pm EST.
In advance of the upcoming webinar Corgentum has issued a press release announcing the event. The release also announces that Corgentum will host a series of quarterly operational due diligence webinars in 2012. These educational dialogues will feature vital insights into important operational risk trends for 2012.
News of Corgentum's upcoming webinar is spreading fast and the event was also recently featured on the TAbbFORUM
If you have not already done so be sure to register for March 15th webinar today!
March 8 , 2012
New Video Released in Anticipation of Upcoming Private Equity Operational Due Diligence Book
In anticipation of the upcoming release of Corgentum Consulting Managing Partner Jason Scharfman's
new book
on April 10, 2012, a new video has been released.
The video can be viewed here:
It is also available in the new book's section on the publications and videos sections of Corgentum.com.
To pre-order the book please visit the publisher's website.
February 29 , 2012
Corgentum to Moderate Real Estate Panel at Opal's Family Office and Private Wealth Management Forum
It has been announced that Jason Scharfman will participate in the Family Office and Private Wealth Management Forum on July 23 through the 25th in Newport, Rhode Island.
Specifically, Mr. Scharfman will moderate the real estate panel which will take place on July 24th at 12:30pm. The conference will be and will be held at The Hyatt Regency Newport. Mr. Scharfman is anticipated to discuss the following topics on his panel:
- Evaluating real estate funds
- Private equity real estate
- Operational due diligence for real estate funds
This panel will also cover several topics included in Scharfman’s upcoming book, Private Equity Operational Due Diligence: Tools for Evaluating Liquidity, Valuation and Documentation.
To sign up for the conference, click here
February 28 , 2012
Corgentum Paper Outlines Why Familiar Names Do Not Automatically Produce Low Risk Environments
Corgentum released their new research piece entitled: Why Familiar Names Do Not Automatically Produce Low Risk Environments . This piece discusses why hedge fund managers and investors may be too quick to associate familiarity of an administrator with lower degrees of operational risk.
This research paper will cover:
- Why a “check the box” approach is not effective in determining the level of operational risk
- Why a big name administrator does not necessarily mean they will have a lower risk than a smaller one
- Only a complete operational due diligence review can guarantee the level of risk within a fund
The paper can be found in the Research section of the corgentum.com website, or via direct link here.
February 22 , 2012
Corgentum to Moderate Real Estate Private Equity Panel at Real Estate Investors Summit
Corgentum will moderate the real estate private equity panel at the Real Estate Investors Summit: Dealmakers Conference in Miami, Florida on April 26th at 8:20 am.
The conference will be April 25 through the 27th and will be held at The Perry South Beach. Scharfman's panel will cover:
- Operational due diligence and why it is important to real estate and private equity funds.
- Current trends in real estate private equity
- Strategies for creating your private equity operational due diligence plan
- 2012 tactics for those who allocate in private equity funds
This panel will also cover several topics included in Scharfman’s upcoming book, Private Equity Operational Due Diligence: Tools for Evaluating Liquidity, Valuation and Documentation.
To sign up for the conference, click here
February 15 , 2012
Corgentum Announces Release of Quarterly Newsletter- Operational Due Diligence Insights
Corgentum Consulting today announced the release of a new investor newsletter which will provide unique perspective and insights on the evolving state of operational due diligence. Each issue of the newsletter, which is called Operational Due Diligence Insights will focus on core areas of fund operational due diligence. Articles in the most recent issue include:
- The effect of increased fund regulatory requirements in light of recent SEC registration on fund manager due diligence
- Strategies for evaluating fund business continuity and disaster recovery
- Analyzing adminitrator independence in the valuation process
- Evaluating information security risk
- Operational due diligence on private equity funds
- Evaluating financial statement risk in master-feeders
February 9 , 2012
Corgentum To Host Operational Due Diligence Webinar -
Operational Due Diligence Survival Kit for 2012
It has been announced that Corgentum will host the firm's inaugural webinar on March 15 from 2-3pm EST. The webinar is entitled, Operational Due Diligence Survival Kit for 2012: Essential skills for uncovering and evaluating operational risk in hedge funds, private equity and traditional funds.
2012 has ushered in many new operational challenges for fund managers. This educational webinar will provide investors with an overview of critical tools needed to perform operational due diligence on hedge funds, private equity and traditional funds. Topics anticipated to be discussed include:
- Techniques for evaluating a fund manager's compliance with new regulatory registration requirements
- How to develop and implement an action plan for effective operational due diligence in 2012
- Approaches towards analyzing the increasingly broad nature of service provider offerings
January 16 , 2012
Corgentum Releases 2012 Legal and Compliance Focus
Corgentum Consulting has released a new research paper which provides an introduction for investors to some of the legal and compliance challenges which fund managers will face in 2012. Specifically, the paper entitled, Corgentum - 2012 Legal and Compliance Focus covers a number of new compliance developments which fund managers will face in 2012 including the new SEC registration requrements, the revised Form ADV disclosures, and the Form PF disclosures. This guide will serve as a primer for investors to assist them in performing operational due diligence on fund managers legal and compliance functions in 2012. The paper can be found in the Research section of the Corgentum.com website, or via direct link here.
January 13, 2012
Corgentum to Moderate Risk Management Panel at 6th Annual Private Equity Summit for Institutional Investors
It has been announced that Corgentum Consulting Managing Partner, Jason Scharfman will moderate the risk management panel at the upcoming 6th Annual Private Equity Summit for Institutional Investors. During the private equity risk management panel it is anticipated that Mr. Scharfman will address private equity operational due diligence topics including:- the current state of private equity operational due diligence
- trends in limited partner private equity risk management from both investment and operational perspectives
- evaluating latent general partner operational risk exposures
- differences between private equity and hedge funds operational due diligence
- The benefits to limited partners of working with an operational due diligence consultant such as Corgentum, to design a private equity operational due diligence program
January 12 , 2012
Corgentum to Moderate Alternatives Panel at Investment Education Symposium
Corgentum Consulting Managing Partner, Jason Scharfman will moderate the alternative investments panel session at the upcoming Opal Investment Education Symposium. The conference is being organized in conjunction with the Louisiana Trustee Education Council (LATEC). The panel Mr. Scharfman will moderate will be entitled, "Investing in Alternatives" and will take place on Wednesday February 15, 2012 at the Astor Crowne Plaza in New Orleans, LA.
At the panel sessions, it is anticipated that Mr. Scharfman will focus the discussion on upcoming trends in operational risk in alternative investments including hedge funds and private equity funds. Other topics which are anticipated to be discussed include the role of operational due diligence consultants such as Corgentum in designing a comprehensive operational due diligence solution, and operational due diligence challenges institutional investors can expect in 2012.
To register for the event here, please visit the conference website.January 11 , 2012
Corgentum Launches Twitter Feed - Focus on Operational Due Diligence
Corgentum Consulting now has a Twitter feed! Corgentum's feed will provide news and updates on Corgentum Consulting. Followers of Corgentum's Twitter feed will also be alerted to news and events related to the hedge funds, private equity and operational due diligence. Visit the feed directly by clicking here or follow Corgentum click on the following image: Follow @Corgentum
January 3 , 2012
Corgentum to Moderate Hedge Fund Panel at Opal's 2012 Consultants Forum
It has been announced that Corgentum Consulting Managing Partner, Jason Scharfman will moderate the hedge funds panel at the upcoming Opal 2012 Investment Consultants Forum. The panel will be entitled, "Hedge Fund Opportunities" will take place on Friday March 2, 2012 at the Crowne Plaza Times Square in New York, NY.
It is anticipated that Mr. Scharfman will discuss evolving trends in hedge fund operational due diligence for 2012, the benefit to investors towards working with operational due diligence consultants such as Corgentum, and the benefits of incorporating risk considerations into the hedge fund portfolio construction process.
To register for the event here, please click here.December 2 , 2011
Corgentum Paper Outlines the Dangers of Generic Operational Risk Reports
Corgentum Consulting has released a new paper outlining the dangers of generic canned operational risk reports. The paper entitled, The dangers of generic canned operational due diligence reports outlines several concerns investors should have about these canned reports. These concers may include the fact that investors have different operational sensitivities, operational risk factor weights vary among managers and that information overload can dampen operational sensititivities. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
August 18 , 2011
Corgentum's Scharfman to Lecture on Hedge Fund Operational Risk and Due Diligence at New York University
It has been announced that Corgentum Consulting Managing Partner Jason Scharfman, will once again teaching a course at New York University on the subjects of hedge fund operational risk and due diligence. This course, is applicable towards NYU's Certificate in Financial Risk Management, as well the school's Certificate in Ethics and Corporate Governance . The class is titled, Hedge Fund Operation Risk and Due Diligence and will run for eight sessions beginning on September 21, 2011. The course description is outlined below:
Establish a solid understanding of the essential techniques required to perform legal, regulatory, back office investment, and operational due diligence on hedge funds and other alternative investments. Topics include an overview of fund legal and financial documentation, valuation and custody assessment, asset verification techniques, common red flags, fraud case studies, and fund interview strategies. The course is designed for attorneys, auditors, investment analysts, legal and compliance professionals, and investor relations and marketing professionals interested in developing a comprehensive understanding of alternative investment due diligence techniques and issues.
For more information or to enroll in this course please visit the course details homepage.
August 12 , 2011
Corgentum's Expert Witness Work Covered in the Hedge Fund Law Report
In addition to operational due diligence services on behalf of investors, Corgentum also consults with attorneys who represent investors in matters related to the alternative investment industry with a particular focus on due diligence. A recent expert report written by Corgentum Consulting Managing Partner, Jason Scharfman in a case which focuses in part on due diligence was recently covered in the Hedge Fund Law Report . The article entitled, Federal Court Decision Holds That a Fund of Funds Investors May Sue a Fund of Funds Manager That Fails to Perform Specific Due Diligence Actions Promised in Writing and Orally is available in the current issue (Vol. 4, No. 27 - August 12, 2011) and is available online (subscription required).
August 2 , 2011
Corgentum's Scharfman to Moderate Prviate Equity Panel at Opal's 2011 Endowment and Foundation Forum
It has been announced that Corgentum Consulting Managing Partner, Jason Scharfman will moderate the private equity panel at the upcoming Opal Endowment and Foundation Forum. The panel will be entitled, "Private Equity: Where do the best opportunities exist?"
It is expected that Mr. Scharfman will discuss trends in endowments and foundations approaches towards private equity operational due diligence, the evolving role operational risk assessment plays in the private equity asset allocation process, comparisons among operational due diligence approaches towards private equity and hedge fund and traditional funds, and operational due diligence techniques and trends for buyout and real estate funds. The panel, "Private Equity: Where do the best opportunities exist?", will take place on September 22, 2011 at the Marriott Long Wharf in Boston, MA. To register for the event here, please click here.July 5 , 2011
Corgentum Provides Insights Into Information Security and Cyber Attack Threats To Hedge Funds Review
Corgentum Consulting recently sat down with Hedge Funds Review to discuss the operaitonal risks surrounding information technology to hedge funds. In the article entitled, Cyber Attack Alert: Leading hedge funds assess threat from cyber criminals" , Corgentum Managing Partner, Jason Scharfman highlights the importance of information security assessment during the investor operational due diligence proces. " Information security is extremely overlooked by hedge funds. They are information-driven organisations but with very basic controls in place to protect their information ” says Mr. Scharfman.
The article also outlines the importance of installing protections against cyber attacks and protecting proprietary information. The enitre article can be read on Hedge Funds Review or via direct link.
April 25 , 2011
Corgentum's Scharfman Discusses Administrator Conflicts of Interest and Due Diligence with Forbes
In a recent article in Forbes, Corgentum Consulting Managing Partner, Jason Scharfman discusses some of the risks to investors surrounding hedge fund administrator conflicts of interest. The article is entitled, "Protection Racket - Investors rely on independent administrators like Citco to okay hedge fund books. But who's watching these bookkeepers?" , Mr. Scharfman also discusses the role of hedge fund administrators in the investor operational due diligence process. " Part of the reason big-name administrators are winning more hedge fund assets is that they offer a false appearance of comfort and illusions of due diligence. Investors are still very much on their own in the hedge fund arena, " says Mr. Scharfman. The full article can be read on Forbes.com , in print editions of Forbes magazine for the week of April 25, 2011 or via direct link.
April 4 , 2011
Corgentum Focuses on Operational Risk with HFMWeek
Corgentum Consulting Managing Partner, Jason Scharfman is featured this week in an article discussing the future of operational risk. In the article, which is entitled "Focus on Operational Risk" Mr. Scharfman discusses the enhanced focus which investors and hedge funds have placed on operational risk management and operational due diligence in the aftermath of the financial crisis. Mr. Scharfman also cites Corgentum’s proprietary research which demonstrates an increasing trend that managers with weaker operational infrastructures demonstrate lower performance as opposed to those with stronger operations. Other key operational risk considerations outlined by Mr. Scharfman in the article include:
- The presence of conflicts of interest related to providing operational due diligence services to both hedge funds and investors
- The dangers of over reliance on hedge fund regulation to supplant investor's own due diligence efforts
- Ways in which investors can benefit from having an independent third party consultant such as Corgentum assisting with operational due diligence reviews
- The benefits to a hedge fund's operations of proper internal resource allocation and management oversight
March 1 , 2011
Corgentum Releases Guide to Understanding Hedge Fund's Approach to Prime Brokerage
Corgentum Consulting has released a new guide providing an overview to hedge fund's approaches to prime brokerage. This paper provides an overview of the operational risk and challenges which prime brokerage presents hedge funds. Understanding Your Hedge Fund's Approach To Prime Brokerage also discusses investor operational due diligence considerations for utilizing multiple prime brokers, the role of introducing prime brokers and bundled prime brokerage services. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
January 28, 2011
Corgentum to present on the Role of Alternative Investments In the Asset Allocation Process at Opal's Investment Consultants Forum
It has been announced that Corgentum Consulting Managing Partner, Jason Scharfman will moderate a panel at an event entitled, the Role of Alternative Investments In the Asset Allocation Process at Opal's Investment Consultants Forum It is expected that Mr. Scharfman will discuss operational risk considerations for hedge fund allocation, operational due diligence considerations for alternative investment portfolio construction, and current trends in integrating operational risk into the asset allocation process.
The event will take place on March 7, 2011 at the Grand Hyatt Hotel in New York City. To register for the event here, please click here.
January 1, 2011
Corgentum outlines the importance of recognizing a hedge fund's operational stengths and weaknesses with Risk.net's Operational Risk & Regulation Journal
The recent comments of Jason Scharfman, Corgentum Consulting Managing Partner regarding the enhanced focus being placed by investors on hedge fund operational risk were outlined in Risk.net's Operational Risk & Regulation Journal in an article entitled, Operational infrastructure at hedge funds comes under closer scrutiny . Topics outlined by Mr. Scharfman in the article include:
- Continued failures of many hedge fund with in regards to documenting operational policies
- Benefits of hedge funds emphasizing their operational strengths and openly discussing operational weaknesses
- The false artifical operational floor of Dodd-Frank legislation
- Inherent benefits of investors develop dialogues concerning operational risks with their hedge fund managers
December 22, 2010
Corgentum highlights the importance of robust hedge fund operational policies and valuations procedures with Opalesque
A recent Opalesque article outlined the recet the comments of Jason Scharfman, Corgentum Consulting Managing Partner on the subject of trends in hedge fund operational risk. In the article, which is entitled 20% of marketing presentation should be dedicated to investor education , Mr. Scharfman outlines in part that, "[managers] need to have a robust operational policy (from pricing sources, to valuations, to how the administrator receives that information, to cash management policies)." The full article can be read on the Opalesque website (subscription required).December 9, 2010
Corgentum's Scharfman to discuss the emerging trends in hedge fund operational due diligence at Eze Castle Integration webinar
Corgentum Consulting Managing Partner, Jason Scharfman will be a panelist at web-based panel sponsered by Eze Castle Integration on the subject of hedge fund operational due diligence. The event is a follow up to another event entitled, Hedge Funds: Examining Operational Risk and Due Diligence hosted by Eze Castle Integration. The topics covered during the presentation are expected to include:
- How the perception and implementation of due diligence has changed in the hedge fund industry?
- Actionable due diligence recommendations for hedge fund managers
- Technology considerations for due diligence
- What’s next for operational due diligence?
The event will take place on December 9, 2010. To register for the event here, please click here.
November 29, 2010
Corgentum's Overview of Material Nonpublic Information - Operational Due Diligence Considerations For Hedge Funds in the US
Corgentum Consulting has released a new paper entitled, Hedge Fund Operational Due Diligence Education Series - Understanding Material Nonpublic Information in the United States. This paper provides an introduction to the ways in which hedge funds may interact, either directly or indirectly, with material nonpublic information. Areas addressed in this paper include a hedge funds use of expert networks as well as other third-party firms which provide information to hedge funds. Also discussed in this paper are several questions investors should address during the operational due diligence process in order to diagnose both a fund's potential exposures to the risks associated with material nonpublic information as well as what preventative measures, if any, a hedge fund may have taken to insulate themselves for the liability associated with receiving or trading on such information. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
November 19, 2010
Corgentum's Scharfman Discusses Private Equity Compliance with Wall Street Journal: Gearing Up For SEC Registraiton
Jason Scharfman, Corgentum Consulting Managing Partner, discusses the initial and on-going compliance requirements to be faced by private equity funds in light of the new Dodd-Frank financial law and pending likely Securities and Exchange Commission registration requirements with the Wall St. Journal. The article is entited, " Private Equity Funds Gear Up For SEC Registration ". Drawing a distinction between hedge fund and private equity compliance risks, the article quotes Mr. Scharfman in part as saying,
" Some of the compliance problems that could arise in a transaction-based business model, such as a hedge fund, aren't likely to crop up at private equity funds, said Scharfman. The risk is very low, for example, that private equity fund employees would trade equities from their own accounts ahead of the fund, he said. Developing and monitoring insider trading restrictions, however, will be necessary for both types of firms, said Scharfman. "
The full article can be read on the Wall St. Journal website (subscription required).November 18, 2010
Corgentum Research featured in Operational Due Diligence White Paper
Excerpts from Corgentum Consulting's original hedge fund operational research have been included in a recent Hedge Fund Operational Due Diligence White Paper released by Infovest21. Specifically, the white paper references the hedge fund operational due diligence framework trends discussed in the Corgentum paper, Analyzing Operational Due Diligence Frameworks In Fund Of Hedge Funds. The findings of the Corgentum operational due diligence research were also included in an article in FINalternatives entitled, Report Shines Light on Funds of Funds' Operational Due Diligence. The original research papers can be found in the Research section of the www.corgentum.com website, or via direct link here.
October 29, 2010
Corgentum to Discuss the Changing Landscape of Operational Due Diligence in Alternative Investments at Investment Consultants Forum Midwest
It has been announced that Corgentum Consulting Managing Partner, Jason Scharfman will moderate a panel at an event entitled, The Changing Landscape of Alternative Investments and what opportunities lie ahead? at the Opal Investment's Consultant Forum Midwest It is expected that Mr. Scharfman will discuss the developing role of operational due diligence, considerations for integrating operational risk into the asset allocation process, and techniques for family offices to integrate operational due diligence into their investment process.
The event will take place on December 2, 2010 at the W Hotel Lakeshore, Chicago, IL. To register for the event here, please click here.
October 22, 2010
Corgentum to present at Eze Castle Integration Panel : Examining Operational Risk and Due Diligence
Corgentum Consulting Managing Partner, Jason Scharfman will be a panelist at an event entitled, Hedge Funds: Examining Operational Risk and Due Diligence hosted by Eze Castle Integration. The topics covered during the presentation are expected to include:
- The impact of recent crises on how managers conduct operational due diligence
- What aspects of a hedge fund's operations are most important to investors today?
- Best practices for meeting increased due diligence scrutiny
The event will take place on November 10, 2010 at the Hilton New York. To register for the event here, please click here.
October 8, 2010
Corgentum Brings Operational Due Diligence focus to fund of funds panel at Boston Endowment & Foundation Forum
It has been announced that Corgentum Consulting Managing Partner, Jason Scharfman will moderate a fund of hedge funds panel at Endowment & Foundation Forum at the Opal Endowment & Foundation Forum at the Hyatt Regency Boston, Boston, MA on November 2, 2010. Topics anticipated to be discussed in the panel discussion include:
- What makes funds of funds useful?
- The role of operational due diligence, post Madoff?
- The evolving role of funds of funds, post 2008
Rather than focusing on a particular investment style, this endowment and foundation conference will tackle the issues that are most germane to the nation's endowments and charitable foundations by examining critical investment topics, as well as the need to align fiscal strategy with the goals of a particular organization. More information about the conference can be found here.
October 4, 2010
Corgentum Releases New Paper :
Hedge Fund Audits: Scope, Materiality, Audit Opinions and Operational Risk
A new research paper entitled, Hedge Fund Audits: Scope, Materiality, Audit Opinions and Operational Risk has been released by Corgentum Consulting . This paper provides an introduction to audit opinions, the concept of audit materiality and audit scope in the context of assessing operational risk in hedge funds. Also discussed in this paper are several commonly held misconceptions regarding the work of hedge fund auditors. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
September 24, 2010
New Corgentum Paper :
The Impact of Dodd-Frank on Hedge Fund Operational Due Diligence
Corgentum Consulting has released a new paper which provides an overview of the impact of Dodd-Frank legislation on hedge fund operational due diligence. This paper provides an introduction to some key considerations for investors to consider during the operational due diligence process, as they begin to evaluate hedge funds in the new Dodd-Frank environment. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
August 26, 2010
New Corgentum Research Paper :
Corgentum – The Advantages of Having a Local Hedge Fund Operational Due Diligence Presence
A new paper has been released by Corgentum Consulting entitled Corgentum – The Advantages of Having a Local Hedge Fund Operational Due Diligence Presence . This paper provides an overview of the benefits of Corgentum's local presence in the heart of the New York area’s hedge fund community. Corgentum’s local knowledge and expertise provides our firm with significant insights for managers based in New York, Connecticut, New Jersey and the surrounding areas. This local presence compliments our firm’s broader global hedge fund coverage. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
June 10 , 2010
New Corgentum Research Paper :
Hedge Fund Audited Financial Statement Reviews During Operational Due Diligence
A new research paper by Corgentum Consulting has been released entitled Hedge Fund Audited Financial Statement Reviews During Operational Due Diligence. This paper provides a discussion of the importance of audited financial statement reviews as part of the broader hedge fund operational due diligence process. Additionally, this paper provides a list of key questions investors may want to consider when reviewing audited financial statements. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
June 8 , 2010
Corgentum Releases New Paper :
Hedge Fund Operational Due Diligence Questionnaire — To Use or Not To Use?
Corgentum Consulting has released a new research paper which provides an overview of the role due diligence questionnaires ("DDQ's") and request for proposals ("RFP's") play in the hedge fund operational due diligence process. This paper also outlines some key questions and other considerations investors should bear in mind before asking a manager to complete a customized due diligence questionnaire. The paper entitled, Hedge Fund Operatinal Due Diligence Questionnaire — To Use or Not To Use? can be found in the Research section of the corgentum.com website, or via direct link here.
June 4 , 2010
New Research Piece - Hedge Fund Operational Due Diligence: An Absolute or Floating Standard?
Corgentum Consulting has released a new research piece which discusses the pros and cons of applying absolute best practice and floating standards towards hedge fund operational due diligence. This paper outlines, the benefits to investors of developing and maintaining competency of global operational risk trends. While an absolute best practice standard facilitates uniformity in comparing operational risk information, this methodology can suffer from rigidity. A floating standard can better accommodate the particularities of hedge funds operating in different regions but runs the risk of being overly flexible. Hedge Fund Operatinal Due Diligence: An Absolute or Floating Standard? can be found in the Research section of the corgentum.com website, or via direct link here.
May 28 , 2010
Corgentum releases new paper : Education Series - Information Technology Due Diligence
Corgentum Consulting has released a new paper entitled, Education Series - Information Technology Due Diligence This paper discusses the often overlooked nature and importance of incorporating a review of a hedge fund's information technology infrastructure into the investor operational due diligence process. Specifically, the information technology topics discussed in this piece include a review of a hedge fund's hardware, software, business continuity and disaster recovery and information security. This paper can be found in the Research section of the corgentum.com website, or via direct link here.
April 7, 2010
Corgentum's Scharfman to teach hedge fund operational risk and due diligence class at New York University
Corgentum Consulting Managing Partner Jason Scharfman, will be teaching a course at New York University on the subjects of hedge fund operational risk and due diligence. This course, which is applicable towards NYU's Certificate in Financial Risk Management, will run for eight sessions beginning on Wednesday May 26, 2010. The course description is outlined below:
Establish a solid understanding of the essential techniques required to perform legal, regulatory, back office investment, and operational due diligence on hedge funds and other alternative investments. Topics include an overview of fund legal and financial documentation, valuation and custody assessment, asset verification techniques, common red flags, fraud case studies, and fund interview strategies. The course is designed for attorneys, auditors, investment analysts, legal and compliance professionals, and investor relations and marketing professionals interested in developing a comprehensive understanding of alternative investment due diligence techniques and issues.
For more information or to enroll in this course please visit the course details homepage.
April 5, 2010
Corgentum releases new paper : Education Series - Evaluating Your Hedge Fund’s Administrator
Corgentum Consulting has released a new paper entitled, Education Series - Evaluating Your Hedge Fund’s Administrator This paper discusses several key questions investors can utilize to evaluate their hedge fund's administrator. Other topics addressed in this paper include the importance of understanding the nature of the administration services being provided, the need to monitor the on-going relationship between the hedge fund and the administrator and the diagnostic process concerning the role played by the administrator in the overall valuation process. This paper can be found in the Research section of the corgentum.com website, or via direct link here.
April 2, 2010
Corgentum to present at 2010 Public Funds Summit East - "Legal issues facing public pension plans"
Corgentum Consulting Managing Partner Jason Scharfman, will be speaking at the Opal Financial Group's 2010 Public Funds Summit East on a panel entitled, "Legal issues facing public pension plans." Topics Mr. Scharfman plans to address in this panel discussion include the implications of recently proposed regulatory frameworks for the pension fund hedge fund due diligence process, steps pensions should take to vet conflicts of interests between consultants and asset managers and the importance of documenting the hedge fund operational due diligence process. The conference will take place in Newport, Rhode Island on July 21, 2010. The full conference agenda can be viewed on Opal's website.
March 10, 2010
Corgentum releases new paper: Information Overload Red Flags - When a hedge fund doesn’t know when to say when to due diligence information requests
Corgentum Consulting has released a new paper entitled, Information Overload Red Flags - When a hedge fund doesn’t know when to say when to due diligence information requests. This paper discusses the importance of understanding and diagnosing the hedge fund due diligence document distribution process as part of the overall operational risk evaluation of a hedge fund manager. Questions posed by this paper for investors to consider include: Are response requests pro-active or reactive? and How is investor information protected? Also highlighted in this paper are the potential for increased operational risks in hedge funds which do not effectively manage due diligence related document distribution. This paper can be found in the Research section of the corgentum.com website, or via direct link here.
January 29, 2010
Corgentum's Scharfman to moderate consultants panel: The Changing Landscape of Alternative Investments and what opportunities lie ahead?
Corgentum Consulting Managing Partner Jason Scharfman, will moderate a panel at the upcoming Opal Investments Consultants Forum entitled, "The Changing Landscape of Alternative Investments and what opportunities lie ahead?" Mr. Scharfman will address topics including the increasing resources being dedicated towards due diligence, the evolving nature of operational due diligence and the effect of the global recession on due diligence. The conference will take place on March 11, 2010 at the Princeton Club of New York . For more information regarding the conference or to register please visit Opal's website.
November 24, 2009
Corgentum releases, Hedge Fund Service Provider Due Diligence: A Window Into Operational Risk
Corgentum Consulting has released a new paper entitled, Hedge Fund Service Provider Due Diligence: A Window Into Operational Risk This paper discusses the importance of conducting a review of a hedge fund's service providers (i.e. - admnistrator, auditor, legal counsel etc.) as part of the operational due diligence process. When evaluating such service providers this paper also highlights the benefits of reviewing such relationships from both the service provider’s and hedge fund’s perspective to yield a a more complete operational picture of a hedge fund. This paper can be found in the Research section of the corgentum.com website, or via direct link here.
September 23, 2009
Scharfman Discusses the Galleon Group insider trading case with Wall Street Journal:
Devil Is In Details For Hedge-Fund Advisers
Jason Scharfman, Corgentum Consulting Managing Partner, discusses the insider trading allegations, fraud and conspiracy charges brought by the Securities and Exchange Commission against the Galleon's Group Raj Rajaratnam with the Wall St. Journal's Compliance Watch. The article is titled, "Devil Is In Details for Hedge-Fund Advisers " and focuses on the compliance risks hedge funds face surrounding their interaction with executives at companies in which perform research on, or make direct investments. Mr. Scharfman says in part, " Executives at firms will pay lip service to those who hold big positions." The full article can be read on the Wall St. Journal website.
September 23, 2009
Corgentum featured in Wall Street Journal's Compliance Watch: Hedge Fund Investors Want Business Details
Corgentum Consulting Managing Partner, Jason Scharfman, was featured in the Wall St. Journal's Compliance Watch. In the article entitled, "Hedge Fund Investors Want Business Details" Mr. Scharfman highlights how in the post-Madoff environment hedge fund investors are demanding, "increased granularity" in due diligence. He further goes on to provide an example of legal documentation risk in hedge funds. The full article can be read on the Wall St. Journal website.
September 8, 2009
Corgentum Releases Jack of all trades or master of none? - The benefits of multi-disciplinary operational due diligence
Corgentum has released a new paper entitled, "Jack of all trades or master of none? - The benefits of multi-disciplinary operational due diligence" . This piece discusses the risks associated with focusing too heavily on one area of operational due diligence and the benefits associated with the expansion of often self-limiting myopic due diligence approaches. By utilizing a broader multi-disciplinary approach, this paper outlines the ways in which hedge fund investors may seek to analyze a more complete spectrum of operational risks via a multi-disciplinary approach. This paper can be found in the Research section of the corgentum.com website, or via direct link here.
September 3, 2009
Corgentum's Scharfman to speak at CFA Virginia Society about post-Madoff alternative investments operational due diligence
Corgentum Consulting Managing Partner, Jason Scharfman, will be giving a talk at the CFA Viriginia Society in Richmond Viriginia. Mr. Scharfman's presentation is entitled, "Post-Madoff Alternative Investments Operational Due Diligence" and will focus on the new challenges confronting both hedge funds and investors in the post-Madoff environment. The presentation will take place at 12pm on October 1, 2009. For more information and to RSVP please visit the CFA Virginia website .
August 6, 2009
Corgentum Releases new paper, Has Rigor Mortis Set In On Your Due Diligence? - The dangers of inflexible operational risk methodologies
Corgentum has released a new piece entitled, Has Rigor Mortis Set In On Your Due Diligence? - The dangers of inflexible operational risk methodologies. This paper outlines the benefits of adding an element of flexibility to operational due diligence approaches and cautions against overly rigid operational risk methodologies. The piece can be found in the Research section of the corgentum.com website, or via direct link here.
July 21, 2009
Canadian Hedgewatch publishes Corgentum's Fund of Hedge Fund Operational Risk Study
Canadian Hedgewatch published the Corgentum Consulting study entitled, Analyzing Operational Due Diligence Frameworks In Fund Of Hedge Funds . The study appears in the July 2009 (volume 9, Issue 7) monthly report. The study can be found in the Research section of the corgentum.com website here. Reference to the study can also be found on the Canadian Hedgewatch website .
July 21, 2009
Corgentum releases new paper Ten Questions Every Investor Should Ask Their Hedge Fund Manager: Operational Risk
Corgentum recently released a new piece entitled, Ten Questions Every Investor Should Ask Their Hedge Fund Manager: Operational Risk . In the post-Madoff environment many hedge fund investors, both institutional and ultra-high net worth, are taking an increased responsibility for overseeing their own due diligence. This piece outlines ten questions investors should ask during the operational due diligence process. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
July 20, 2009
Hedgeco.net discusses Corgentum's Fund of Hedge Fund Operational Due Diligence Study
In a recent post HedgeCo.net's Alex Akesson discussed Corgentum's fund of hedge funds operational risk framework study. The post entitled, "Fund of Hedge Fund Operational Due Diligence - Study" , provides an overview of the key points of Corgentum's study which is titled, "Analyzing Operational Due Diligence Frameworks In Fund Of Hedge Funds." . The study can be found in the Research section of the corgentum.com website here. The full HedgeCo.net post can be read here and on the Hedge Fund News Blog .
July 16, 2009
Corgentum's Scharfman to moderate fund of funds panel at Endowment & Foundation Forum
It has been announced that Corgentum Consulting Managing Partner, Jason Scharfman will moderate a fund of hedge funds panel at Endowment & Foundation Forum at the Opal Endowment & Foundation Forum at the Hyatt Regency Boston, Boston, MA on October 26, 2009. Rather than focusing on a particular investment style,this conference will tackle the issues that are most germane to the nation’s endowments and charitable foundations by examining critical investment topics, as well as the need to align fiscal strategy with the goals of a particular organization. More information about the conference can be found here.
July 15, 2009
Corgentum releases new piece, Thinking outside the box - Seven innovative due diligence techniques
Corgentum Consulting has released a new paper entitled, Thinking outside the box - Seven innovative due diligence techniques. This paper outlines new techniques investors can utilize during the course of the hedge fund due diligence to innovatively adapt to the modern due diligence environment. The paper can be found in the Research section of the corgentum.com website, or via direct link here.
July 2, 2009
New Corgentum research paper, Preparing for the operational due diligence visit: A hedge fund's guide
From the perspective of a hedge fund manager, preparing for an operational due diligence visit is a critical in the post-Madoff era. To provide some guidance in this area Corgentum Consulting has released a new research piece entitled, Preparing for the operational due diligence visit: A hedge fund's guide. The paper can found in the Research section of the corgentum.com website, or via direct link here.
June 29, 2009
Scharfman author's guest piece for Pension and Investments, "Investing in hedge funds just got harder"
Corgentum Managing Partner, Jason Scharfman recently authored a guest article for Pensions and Investments where he discusses the many challenges facing pensions seeking to perform operational due diligence on hedge funds. The article, which is featured in the publication's Regulation & Legislation section, is entitled, "Investing in hedge funds just got harder" . In the piece, Mr. Scharfman writes, "In the post-Madoff environment, sponsors of pension and other funds face a number of complex challenges with respect to performing due diligence on hedge funds..with all of these potential pitfalls, what are pension funds to do? There are a number of basic steps that can be taken to ensure a pension fund is adequately insulated from bearing unnecessary operational risks when investing in hedge funds through separately managed accounts structures." Mr. Scharfman goes onto highlight the benefits and pitfalls of separately managed accounts including, the fact that such structures do not completely remove operational risk. The full article can be read on the Pension & Investments website .
June 22, 2009
Corgentum featured in Campden FB: For families in business in " The mysterious case of the missing due diligence "
Jason Scharfman Corgentum Managing Partner, authored an article for the family office publication, Campden FB: For families in business on the subject of due diligence in the post-Madoff world. The artilce entitled, The mysterious case of the missing due diligence was recently featured in the publications June 2009 edition. Mr. Scharfman writes, "When it comes to the subject of due diligence, family offices allocating to alternatives in general, and hedge funds specifically, face a number of challenges in the post-Madoff environment." The full article can be read on the Campden FB website (subscription required).
June 18, 2009
Corgentum featured in Alternative Universe discussing hedge fund regulation
Corgentum Managing Partner, Jason Scharfman, was featured in Alternative Universe discussing hedge fund regulation. In the article which is titled, "Financial Reg Proposals Have Something For Everyone" , Scharfman says, “The high-net-worth individual or the pension fund may think this is going to be a lot more comprehensive,” ...they think the SEC is going to take care of this and it’s something coming direct from the President. It by no means replaces investors doing their homework.” Mr. Scharfman, also discusses the potential role of the proposed Obama administration's financial plan to create an oversight counsel. The full article can be read in the June 22, 2009 edition (volume 7, Issue 1) of Alternative Universe , (subscription required).
June 18, 2009
Corgentum featured on Forbes.com discussing the effects of Obama administration plan on rating agencies
Corgentum Managing Partner, Jason Scharfman, was featured on Forbes.com discussing the potential effects of the Obama administration proposed financial regulatory plan on rating agencies. In the article entitled, "Obama Calls For More Change: The determined president shifts his attention and energy to the troubled credit rating industry," . Mr. Scharfman states, "Rating agencies are going to be looked at more closely, and will be placed under much more accountability and liability." Highlighting the increased importance of due diligence, Mr. Scharfman additionally was quoted as stating, "Rating agencies will be viewed more as a guide, rather than the be-all-end-all, and you'll see more due-diligence, whether for banks or their clients." Mr. Scharfman also discussed the importance of sufficient capital adequacy requirements in the wake of the events of Barings Bank and Long-Term Capital Management. The full article can be read on Forbes.com.
June 17, 2009
Corgentum featured in Marketsmedia Online piece on regulatory reforms focus on financial risk
In an article in Marketsmedia Online entitled, "Reg Reforms Emphasize Financial Risk" , Corgentum Managing Partner,Jason Scharfman, comments on President Obama's newly proposed financial regulatory reforms. Specifically, Mr. Scharfman highlights how the proposed reform packages, "focuses on financial risks but misses important issues related to operational risk, valuation, back office accounting, and reputational risk that led to Madoff and similar scandals." The full article can be found on the Marketsmedia Online website (subscription required).
June 16, 2009
Corgentum featured on Canada's Business News Network discussing the Obama administration's plan to regulate hedge funds
Corgentum Managing partner,Jason Scharfman, appeared on Canada's Business News Network ("BNN") with Andrew Bell and Kim Parlee, to discuss the effects on the hedge fund industry, both direct and indirect, of President Obama's plan to restrcuture the U.S. financial regulatory system. In the segement, which was titled, The Close: Regulating Hedge Funds, Mr. Scharfman discusses a number of topics including the prospect for reduced influence of rating agencies, changes in the regulatory framework to create a super-regulatory agency, registration requirements for hedge funds, the differences between financial risk and operational risk, lessons learned from historical hedge fund frauds such as Bayou and the challenges of due diligence in the post-Madoff environment. The segment can be viewed on BNN's website .
June 16, 2009
Corgentum's Scharfman discusses the impact of European hedge fund regulation in the US with the Wall Street Journal
Jason Scharfman, Corgentum Managing Partner, discusses the potential consequences of European hedge fund regulation in the US with the Wall Street Journal. In the article entitled, "Europe's Hedge Fund Regulation Efforts Have US Implications" Mr. Scharfman outlines that new regulations are actually "going to hurt a lot of pension funds and other large hedge fund investors because it will be giving them a false sense of security." He further goes on to clarify that "hedge funds aren't trying to avoid tough regulation so they can commit fraud. Rather, they are trying to avoid the bureaucratic red tape that can cost managers lots of time and money, and ultimately dent investors' returns." The full article can be read on the Wall Street Journal website (subscription required).
June 10, 2009
Corgentum featured in Opalesque article, "Has third party administration become a necessity?"
Corgentum, a provider of comprehensive operational risk consulting services to the alternative investment industry, was feature in a recent Opalesque article entitled, "Has third party administration become a necessity?" Jason Scharfman, Managing Partner of Corgentum, comments on the often complicated relationship between hedge funds and administrators saying, "98% of all hedge funds view administrators as a waste of money and a necessary evil that they are forced to use because of their investors." The full article can be read on Opalesque.com (subscription required).
June 8, 2009
Corgentum to present at the Courant Institute of Mathematical Sciences at New York University
It has been announced that Corgentum Consulting will present a seminar on the subject of operational risk in hedge funds at the Courant Institute of Mathematical Sciences at New York University . The seminar, which will taken place on Tuesday September 22, 2009, is part of the Tuesday Seminar series for the Mathematics in Finance Master Students. For more information on the seminar series please visit here.
May 28, 2009
Corgentum's Scharfman writes guest contirubtor article for FINalternatives:
The Depth Of The Dive: Gauging The Scope And Scale Of Due Diligence
Corgentum Managing Partner,Jason Scharfman, has written an article as a guest contributor for FINalternatives. The article, The Depth Of The Dive: Gauging The Scope And Scale Of Due Diligence . The piece states in part, "in the post-Madoff environment it is no longer acceptable for a fund of hedge funds or any institution, which allocates to hedge funds, to simply claim that they have comprehensive investment and operational due diligence practices. These firms must be able to consistently demonstrate the depth and breadth of their due diligence." The full article can be read on the FINalternatives website here.
May 26, 2009
Corgentum releases new study Analyzing Operational Due Diligence Frameworks In Fund of Hedge Funds
Corgentum released a study entitled, Analyzing Operational Due Diligence Frameworks In Fund of Hedge Funds. This study seeks to develop a transparent benchmark against which operational due diligence frameworks may be compared. Key study findings include:
- Only 27% of fund of hedge funds have a full time person on staff or team dedicated to fraud detection
- There are less resources are dedicated to operational due diligence in the US as compared to the rest of the world (Asia and Europe)
- There is lack of consistency in fund of hedge funds operational due diligence approaches
- Smaller fund of hedge funds (under USD $1 billion) use a wide variety of operational due diligence frameworks with less dedicated resources
The full study can be read here
May 14, 2009
Scharfman to moderate HedgeFund.net panel at HFN Investor & Manager Spring Summit: "Next Level Due Diligence - Complementary Methods to Solidify the Process"
It has been announced that Jason Scharfman, Managing Partner of Corgentum Consulting, will moderate a panel at the HedgeFund.Net Investor & Manager Spring Summit on June 3, 2009 at The University Club New York. The panel is titled, "Next Level Due Diligence - Complementary Methods to Solidify the Process." Conference registration information and the full agenda can be reviewed on HedgeFund.Net's website here.
May 13, 2009
Jason Scharfman Op-Ed piece "The Fund of Hedge Funds Regulatory Loophole" featured in the current issue of the Hedge Fund Law Report.
Jason Scharfman, Manging Partner of Corgentum Consulting, has written a guest article for the Hedge Fund Law Report. The piece, "The Fund of Hedge Funds Regulatory Loophole" appears in the current issue of the Hedge Fund Law Report. In the piece, Scharfman states in part that, "All of the proposed hedge fund regulations dangerously ignore the opportunity to protect investors and institutions which place their capital within this lax due diligence framework." The full piece can be viewed on the Hedge Fund Law Report's website (subscription required).
May 13, 2009
Corgentum presents at the Jamison Group's Harvard Club Hedge Fund Regulatory and Corporate Governance Best Practices Seminar
Corgentum Managing Partner Jason Scharfman, spoke on a panel held at the Harvard Club of New York sponsored by the Jamison Group. The session at which Mr. Scharfman spoke was entitled, "Hedge Fund Regulatory and Corporate Governance Best Practices in an Era of Heightened Scrutiny from Both Regulators and Investors.” Mr. Scharfman's comments focused on regulatory trends in hedge funds, key issues in operational due diligence, the evolving role of a hedge fund's board of directors and the operational risks of separate accounts.
May 11, 2009
Corgentum to present at Public Funds Summit East "Navigate the Future" in Newport, RI at a panel entitled, "A look at Pension Consultants and Their Roles"
Jason Scharfman, Corgentum's Managing Partner will be speaking at the Opal Financial Group's Public Funds Summit East panel, "A look at Pension Consultants and Their Roles" in Newport, RI on July 8, 2009 through July 10, 2009. The full conference agenda can be viewed here.
April 14, 2009
Corgentum profiled in HedgeFund.Net article "A New Service-Provider Pitch: Is Your Hedge Madoff-Proof?"
Corgentum Consulting and Managing Partner Jason Scharfman were profiled in a recent piece on HedgeFund.Net. The artilce, which is entitled, "A New Service-Provider Pitch: Is Your Hedge Madoff-Proff?", highlights an increased trend of hedge fund investors seeking guidance from operational due diligence experts such as Corgentum to avoid fraud and Ponzi schemes such as the Madoff crisis. The article reads in part, "While automation and outsourcing were mandated to eliminate mutual fund operational risk, the risk of outright fraud in the hedge fund industry is now fueling service provider growth. Scharfman theorized the average hedge fund [investor] might not be able to undertake due diligence on its own, turning businesses like Corgentum a necessity rather than a luxury." The full article can be read on HedgeFund.Net here.
April 7, 2009
Washington Post Features Corgentum's Scharfman Commenting on the Increased Hazards of Financial Regulation
The Washington Post published an article today, "Expanding financial oversight may add risks - White House regulation plan could increase hazards it's mean to prevent." It reads in part: "The government is going to be more hands-on,and that's going to imply to people the government is vetting the risks relevant to a hedge fund," said Jason Scharfman, managing director of Corgentum, a firm that evaluates whether hedge funds have proper safe internal procedures. "It exposes investors to a false sense of security that they don't need to perform adequate due diligence on the hedge funds they're investing with." The full article is available on WashingtonPost.com or on MSNBC.
April 6, 2009
HedgeFund.Net and FINalternatives cover Corgentum Launch Announcement
News of Corgentum's launch announcement was recently covered by HedgeFund.Net and FINAlternatives. The FINalternatives coverage can be read here. The HedgeFund.Net article can be read here.
April 2, 2009
Corgentum Issues Launch and Hedge Fund Operational Due Diligence:Understanding the Risks Press Releases
Corgentum Consulting has issued a press releases formally announcing the firm's launch. It can be read here. A second press release was issued announcing the publication of Hedge Fund Operational Due Diligence:Understanding the Risks . It can be read here .
March 30, 2009
Corgentum's Scharfman discusses separate accounts with the Wall St. Journal's Compliance Watch
Corgentum Managing Partner, Jason Scharfman, was featured in a Wall St. Journal Compliance Watch article entitled, "Separate Accounts Gain Traction." The article discusses the recent popularity of separately managed accounts among hedge fund investors. Mr. Scharfman cautions against the mixed blessings offered by the increased transparency certain separate accounts often provide by stating, "Parties involved with separate accounts, including the investor, are also typically bound by confidentiality agreements that prevent them from revealing hedge fund managers' positions. Still, even if some information is shared, a fund's strategy would remain difficult to replicate... They can reveal in real time what they're doing, but [investors] don't have the proprietary trading algorithms and structure to do anything about it." The full article can be read on the Wall St. Journal's website (subscription required).
March 30, 2009
Conde Nast Portfolio Mentions Corgentum piece Hedge Fund Regulation Doesn't Matter: An Artificial Operational Floor
Conde Nast Portfolio's Felix Salmon referenced the Corgentum piece Hedge Fund Regulation Doesn't Matter: An Artificial Operational Floor in his Extra Credit, Sunday Edition. The post states, "It's important that hedge-fund regulation not give investors a false sense of security. Its main purpose is to look out for systemic risk, not ponzis." It can be read here at Portfolio.com
March 26, 2009
Canadian Hedgewatch publishes Corgentum research piece Caveat Emptor - The Elusive Definition of Hedge Fund Due Diligence
The Canada based hedge fund publication Canadian Hedgewatch has published the Corgentum research piece Caveat Emptor - The Elusive Definition of Hedge Fund Due Diligence in the March 2009 (Volume 9, Issue 3) monthly report. The Corgentum version of this piece is available in Corgentum.com's research archive or via the direct link here.
March 23, 2009
Director of Finance Online Covers Corgentum's New White Paper The Madoff Identity: A New Operational Due Diligence Paradigm In a Post-Madoff World
The UK based publication Director of Finance Online has posted Corgentum's new white paper The Madoff Identity: A New Operational Due Diligence Paradigm In a Post-Madoff world in its entirety on the Governance section of their website here. The Corgentum PDF version of the white paper is available in Corgentum.com's research archive or via the direct link here. This paper was also recently covered on the Fighting Fraud blog.
March 11, 2009
Trader's Narrative review's Hedge Fund Operational Due Diligence: Understanding the Risks
Trader's Narrative recently reviewed Hedge Fund Operational Due Diligence: Understanding the Risks. The review describes the book in part as follows, "Scharfman’s book explains not only how to diagnose and analyze the operational risks that may be present in a hedge fund, but how to continue to monitor them. This book is invaluable if you are running or thinking of starting a hedge fund, want to invest in one (or already have) or if you work in the field of asset management." The full review can be read on the Trader's Narrative website.
March 6, 2009
Infovest21's Fund of Funds Morning Seminar on Red flags in Madoff, Petters
and other Ponzi schemes will feature Corgentum's Jason Scharfman
The Bernie Madoff Ponzi scheme was just the tip of the iceberg. As the economy falters, similar schemes are surfacing across the US. This seminar brings together industry experts, operational due diligence experts and investigators. Corgentum's Jason Scharfman will be a panelst at the session entitled, Red flags in Madoff, Petters and other Ponzi schemes . Other session include Operational due diligence - Tools and best practices and Impact on investors and possible solutions . To learn about the program, which will take place on March 24, and register for the seminar please visit the Infovest21 website.
March 4, 2009
Jason Scharfman Sits Down With the Wall St. Journal's Compliance Watch
to Discuss How Fraud Has Prompted Increased Operational Risk Transparency
In an interview with Compliance Watch, Mr. Scharfman discusses how in the post-Madoff environment, hedge funds are generally now more inclined then they once were to share information about operational risk factors, including data such as terms of swaps and derivatives agreements. He also discusses how the potential size of an investment can make a difference in the level of operational risk transparency an investor receives. "You can understand hedge funds not giving information about their financial positions - but when it comes to operational issues, investors are inclined to ask, Why Not?," says Scharfman.The full article can be read at the Wall St. Journal's website (subscription required).
March 3, 2009
The Des Moines Register Discusses Iowa's
Exposure to Westrigdge Capital With Jason Scharfman
Jason Scharfman recently analyzed the potential losses of Iowa's largest public employee pension fund (IPERS) with the Des Moines Register. When asked about the potential of Iowa recovering a portion of its $339 million investment he said, "I think the majority of it is gone. So good luck to Iowa.” Mr. Scharfman went on to discuss the many red flags cited by federal investigators including the unusual financial structure utilized by placing hundreds of millions of dollars in promissory notes. The article can be read at the Des Moine Register website.
March 2, 2009
Jason Scharfman Discusses the Westrigdge Capital
and WG Trading Co. Scandal With the Pittsburgh Post-Gazette
Jason Scharfman, Managing Director at Corgentum Consulting, recently discussed the alleged fraudulent activities carried out by Paul Greenwood and Stephen Walsh at Westridge Capital and WG Trading Co. with the Pittsburgh Post-Gazette. "Clearly there were things people could have done on the due diligence side that people weren't doing” said, Mr. Scharfman. "It's obviously concerning that the SEC was in there twice and missed it." The full article can be read here.
February 17, 2009
AIMA Recommends Hedge Fund Operational Due Diligence:
Understanding the Risks in its Online Knowledge Centre
The Alternative Investment Management Association (AIMA) has listed Hedge Fund Operational Due Diligence: Understanding the Risks in the AIMA Bibliography located in the organization’s online Knowledge Centre.
February 3, 2009
Conde Nast Portfolio Discusses “10 Questions to Ask Your Fund-of-Funds Manager”
The Corgentum Consulting research piece, 10 Questions to Ask Your Fund-of-Funds Manager, was featured in Conde Nast Portfolio. “Clearly, some firms’ ideas of ‘thorough due diligence’ leave something to be desired,” states Felix Salmon in Market Movers. The column includes an interview with Jason Scharfman, Managing Partner of Corgentum.
January 26, 2009
HedgeCo.net Reviews Hedge Fund Operational Due Diligence:
Understanding the Risks by Jason Scharfman
Alex Akesson of HedgeCo.net has reviewed Hedge Fund Operational Due Diligence: Understanding the Risks by Jason Scharfman. She described the book as “informative” and “pretty much everything you need to run a hedge fund, from risk management to disaster recovery, all need-to-know material for both investors and hedge fund analysts.” The full review can be found here.
January 16, 2009
Corgentum Featured in Conde Nast Portfolio
The Corgentum Consulting research piece, What’s Wrong With Hedge Fund Operational Risk Ratings and Certifications?, as well as the book Hedge Fund Operational Due Diligence: Understanding the Risks by Jason Scharfman, were featured in Conde Nast Portfolio.
January 8, 2009
Hedge Fund Law Report Reviews Hedge Fund Operational Due Diligence:
Understanding the Risks by Jason Scharfman
An extensive review of Jason Scharfman’s book, Hedge Fund Operational Due Diligence: Understanding the Risks, can be found in the current issue of The Hedge Fund Law Report.
December 15, 2008
Jason Scharfman to Lead Two Sessions on Hedge Fund Operational Due Diligence
at GAIM Ops Cayman 2009 Conference
It has been announced that Jason Scharfman, Managing Partner of Corgentum Consulting, LLC, will moderate two sessions at the fourth annual GAIM Ops Cayman conference. The first session, “Post Credit Crisis – A Series of Case Studies in Risk Management” will take place on the first day of the conference and will focus on:
- A new level of shareholder activism and how it can reduce overall risk
- Increasing returns through operational risk partnerships with hedge fund investors
- Techniques for diagnosing and reducing Operational DragSM
- Balancing on-going operational activism versus transparency concerns
The second session, “Hedge Fund Round Table – How To Prepare For the Due Diligence Visit” will take place on the second day of the conference and bring together high level representatives and leading figures from the alternative investment industry to discuss their concerns for the upcoming year and future of alternative investments.
GAIM Ops Cayman attracts more than 500 senior delegates annually and is the largest hedge fund operational due diligence, compliance and risk management event. The conference will be held from April 26–29, 2009 at the Ritz Carlton Grand Cayman. An agenda for the conference can be viewed here.
September 7, 2008
CFA Magazine Recommends Hedge Fund Operational Due Diligence:
Understanding the Risks
In an article by Ed McCarthy located in the “Private Client Corner” in the September–October 2008 edition (Vol. 19, No. 5) of CFA Magazine, Jason Scharfman’s Hedge Fund Operational Due Diligence: Understanding the Risks (John Wiley & Sons, Inc. 2008) is listed as a recommended resource. The article can be viewed online here.