... and tips from hedge fund gumshoe

Date: Monday, February 18, 2008
Author: Christine Williamson, Pensions & Investments

Given the number of prominent hedge fund meltdowns, blowups and fraud convictions in recent years, many investors might derive peace of mind by accessing the expertise of a bona fide hedge fund detective before they invest in a fund. A new book, “Hedge Fund Due Diligence,” puts the expertise of hedge fund investigator Randy Shain on investors’ desks.

Mr. Shain’s book, published by Wiley Finance, walks hedge fund investors through a detailed methodology to check on hedge funds and presents the results of postmortems performed on failed hedge funds.

Mr. Shain knows his stuff. He is the New York-based vice president of First Advantage Investigative Services, St. Petersburg, Fla. The firm’s bread-and-butter business is the investigation of every aspect of hedge funds: investment and compliance processes; background checks and surveillance of proprietors and portfolio managers; and deep due diligence. First Advantage publishes the results of its investigations in a publication called BackTrack Report. To date, the firm has examined more than 2,500 hedge funds and 4,500 hedge fund managers. — Christine Williamson