BackTrack Reports Addresses The Continuing Need For Background Investigation Into Hedge Fund Managers.Business Editors NEW YORK--(BUSINESS WIRE)--May 23, 2003 At last week's IMN IMN Iraqi Media Network IMN Indicated Mach Number IMN Inter Member Network IMN Infectious Mononucleosis IMN Invisible Moose Network (website) IMN Illegal Macro Name IMN Internet Marketing Newsletter High-Net-Worth Alternative Investing Symposium, Panelist pan·el·ist n. A member of a panel. Noun 1. panelist - a member of a panel panellist panel - a group of people gathered for a special purpose as to plan or discuss an issue or judge a contest etc Ronny Wasser reiterated the need for background due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. investigations into alternative fund managers. Citing the string of high profile mishaps in the hedge fund hedge fund, in finance, a highly speculative, largely unregulated investment device. Originating in the 1950s, the funds "hedge" by offsetting "short" positions (borrowing a security and then selling it at a higher price before repaying the lender) against "long" arena, as well as the tremendous growth in the number of managers and investors coming into the industry, Wasser stated that this facet of due diligence is needed now more than ever. Wasser, the Director of Business Development for BackTrack Reports, Inc. - the most experienced firm in conducting background investigations into hedge fund managers, discussed the elements that compose comprehensive due diligence. He cautioned that conducting this work in a perfunctory per·func·to·ry adj. 1. Done routinely and with little interest or care: The operator answered the phone with a perfunctory greeting. 2. Acting with indifference; showing little interest or care. manner greatly increases the risk of failing to uncover important information in subjects' backgrounds, and that such information can dramatically affect investment decisions. Wasser detailed the importance of conducting litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. research in all areas where subjects of due diligence are known to have lived and worked. "A money manager might indicate they have only lived in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Chicago, but we determine the manager also lived in Florida. We then find that the money manager is the defendant in a significant piece of Florida litigation. This is why doing litigation research thoroughly is so important." In detailing other important components to business background investigations, Wasser commented on the value of proactively searching news and corporate records. "The goal is to identify entities with which a subject has been involved, but that they have not previously disclosed." He also cautioned investors to understand the limits of individual research tools like Nexis, and to think of them as only part of the puzzle. "There is no one source or website an investor can visit and in turn obtain a comprehensive background check." Wasser also detailed the critical importance of interviewing independent subjects who are familiar with managers' backgrounds. "You can not rely on a reference list or your own network of industry contacts. There is a public records trail which will lead you to the independent people with whom it will be most advantageous to speak." Turning to the current regulatory climate regulatory climate The extent to which a regulated firm or industry is permitted to earn an adequate return on the stockholders' investment. This term is nearly always used in reference to utilities, which are required to obtain approval for rate changes. , Wasser and BackTrack believe strongly that while regulation should be welcomed, it will not be a replacement for effective due diligence. Like the investment banking and broker/dealer markets, regulation has its place, and can help eliminate some potential frauds, but is not intended to tell investors who a hedge fund really is, and whether they have items in their background that make them more of a risky bet. Research, not just regulation, is the only panacea Some antidote or remedy that completely solves a problem. Most so-called panaceas in this industry, if they survive at all, wind up sitting alongside and working with the products they were supposed to replace. here. About BackTrack Reports BackTrack Reports, Inc. is the leader in conducting comprehensive background investigations into alternative investment managers. BackTrack has conducted its work into over 800 hedge funds and 2000 funds. For more information on BackTrack, please visit www.backtrackreports.com |
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