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Building a Framework for IDD

• An effective due diligence process
• Risk Scorecard
• HF IDD Process Map

Prequalifying Managers

• Developing and prioritizing a set of internal investment principles
• Employing quantitative analysis to filter potential managers for portfolio fit and exposure to risk

Initiating the IDD Process

• How best to initiate a dialog
• Making the business development team your advocate
• Demonstrate investment activity
• Making the dialog personal
• Explaining your process
• Requesting Additional Information
• Breaking down the documents
• Case Study Time!

Initial Call and Additional Data

• The introductory call (meeting)
• The business development team
• Firm, portfolio, process, funding
• Firm and investment strategy
• How to address basic questions
• Addressing the need for
• additional materials
• Elements of ODD
• Extracting Maximum Information
• Introductory Call Debrief
• Breaking down the additional
• materials

Pre-Due Diligence Questionnaire

• Build, send, and review the pre-DDQ
• Questions to determine whether to/how to proceed

Preparing for the Onsite Meeting

• Reviewing new materials and old
• materials again
• Quantitative analysis on new data
• Conflicts of interest
• Determining whether a manager
• places clients’ interest first
• Evaluating structure and terms
• Identifying key members to meet
• Analyzing exposures and attribution
• Determining onsite agenda
• Creating lines of questioning
• Sourcing points upon which to
• challenge the manager
• Onsite Meeting Outline

Conducting the IDD Onsite Meeting

• Structuring the meeting
• Maximizing the use of information
• Onsite portfolio review
• Evaluating the business, investment
• process, investment team, and
• culture
• Getting managers to reveal information they would rather not

Putting It All Together

• Create an independent reference list
• Background checks
• Revisit Risk Scorecard
• List “items to watch”
• Formulate assessment

Using case studies and real-world examples, attendees will participate in discussions, complete materials for use

back on the job, and develop their own process for completing IDD. In this class, the attendees will:

• Map the Hedge Fund Investment Due Diligence process (IDD).
• Maximize efficiency when conducting IDD.
• Develop a risk framework for IDD.
• Synthesize primary and secondary documents and materials.
• Plan, prepare for, and conduct the due diligence meeting(s).
• Integrate ODD into the IDD process.
• Complete the IDD assessment.

Recommended for:

• Investment professionals from asset managers, such as pension funds, endowments, family offices, insurance companies, sovereign wealth funds, investment and development banks
• Private Equity fund professionals interested in gaining a thorough understanding of the institutional investor’s perspective
• Policy makers and government officials who are responsible for regulating the financial sector
• Advisors working with private equity fund clients, including accountants, lawyers, bankers, consultants and financial advisors

Participants should have an understanding of Public Fund Due Diligence at the fundamentals level before taking this Master level course, including:

• • A deep and thorough background in the financial markets and securities
  • A complete understanding of financial products including; hedge funds, private equity and separate account platforms
  • Strong knowledge and experience working with financial statements
  • Knowledge and understanding of investment strategies