Value Through Knowledge & Innovative Thinking 

Hedge Funds: Due Diligence, Portfolio Construction & Operational Consulting

The FIF team has years of experience evaluating hedge funds for investment from an investor's perspective. We also work directly with funds to reduce operational risk and improve the profile of a fund to an investor.

Due Diligence

In conjunction with the deep experience in the headge fund industry, FIF uses a proprietary template to evaluate funds that has continuously evolved with surfacing operational risks (for example, insider networks). We refer to the template as the Due Diligence DNA as it diagnoses the full workings of a fund using a three-pronged approach.

This approach begins with investment analysis to determine if the fund is a fit for an investor's portfolio and whether it's risk-adjusted return is superior to its benchmark without providing exposure to significant downside. This can be adjusted depending on the needs of the investor. Second, operational risk in the fund is analyzed. Yellow and red flags are noted to signify areas of weakness and concern. This risk is then quantified to give the investor an idea of the relative operationalrisk they are facing by investing in a particualr hedge fund. The last prong is analysis of the manager. A detailed background search, including legal, personal, and professional history is used. A high score in each area will represent a fund that has relatively low operational risk and an investment profile that matches the investor's needs.

Portfolio Construction

The entire due diligence process can be combined with FIF's deep industry knowledge and access to hedge funds to make the process of building a hedge fund portfolio simpler for many investors. FIF has experience constructing portfolios for fund of funds, institutional investors, and individuals.

Operational Consulting

FIF uses its Due Diligence DNA framework to not only evaluate funds for investors but to evaluate funds prior to investor interest. Funds often request this analysis to be sure they meet the high standards of institutional due diligence. In the process, all yellow and red flags will be identified and any risks that can be removed or mitigated will be as FIF works closely with the fund to improve its operations.

Our Experience

Dr. Rainford Knight is active in the hedge fund community and has pioneered many of FIF's proprietary due diligence and hedge fund investment processes.

You can download the program for the Opalesque Florida Roundtable in which Dr. Knight discusses FIF's Due Diligence process by clicking here.

FIF is partnered with the Family Office Institute (FOI) in the area of hedge funds. FOI provides training for family office specialists, industry education, and best practices. Dr. Knight is heavily involved in FOI and you can read more about their family office initiatives below:

Opalesque Press Release: FOI Launching Chartered Family Office Certification
HedgeCo Networks Press Release

Dr. Knight is also a Board Member of the Florida Alternative Investment Association, a south Florida hedge fund industry group focused on matching best of breed managers with institutional allocators as well as on raising the profile of Florida as a hub for alternative investments. Rainford is quoted in the articles below:

Opalesque: FLAIA April One-on-One

Below, find a three segment video in which Dr. Knight discusses due diligence and best practices. Hebegins speaking at 6:50:

We invite you to contact us for more information.

Financial Consulting

Utilize our team to help with valuations, financial projections, and accounting.

Hedge Funds

From infrastructure consulting for new funds to operational and investment analysis for investors.