Developing a Framework for Investor Analysis of Hedge Fund Governance

This chapter provides an investor framework for analyzing hedge fund governance. It discusses the relationship between the increased focus on operational due diligence and governance. The efforts of institutional investors such as the California Public Employees’ Retirement System (“CalPERS”) in promoting governance analysis are discussed. This chapter also outlines techniques for performing due diligence on fund directors including interview techniques and background investigations. Other topics covered in this chapter include the relationship of separately managed accounts with investor governance analysis and governance considerations for investor financial statement analysis.