Survey: Investors Do Due Diligence

Date: Friday, March 7, 2008
Author: HFN Daily Report

A survey of funds-of-funds and family offices has found that investors are very concerned about managers' backgrounds, to the extent that they won't invest with them if they discover something fishy.

The survey, done by nonprofit group The Greenwich Roundtable with Quinnipiac University, found that over 80% of respondents had decided not to invest with a manager after background checks revealed irregularities.

The survey's questions were devoted to five due diligence categories: processes, background checks, investment decisions, fund mangers, fund management and transparency.

Almost half of the survey respondents said they were more concerned with asset valuation and liquidity now than they were 12 months ago. In addition, over 20% said they devoted more than six months to due diligence efforts.

The survey will be repeated every six months to track changes in the way investors make their investment decisions.