Reuters – Hedge fund blowups make for scary headlines but so far they have not frightened investors into looking more closely at how these slightly regulated funds operate before putting money in,new research shows.
In Georgia, investors last week hired a private detective to help state and federal officials find a missing hedge fund manager they say cheated them out of at least $100 million.
And in New York, investors last week sued the attorneys, auditors and advisors who introduced them to a now collapsed hedge fund to recoup the roughly $200 million they are owed.
Even as these dramas play out amid intense media scrutiny, industry consultants at Carbon360 found that only about one in three investors is concerned with a hedge fund’s infrastructure and risk management systems. And only about one in eight double checks how a manager makes the money he said he earned.
Carbon360, the research arm of CarbonBased Consulting, plans to release its survey about trends in the $1.1 trillion hedge fund industry next week.
