BusinessWeek – The recent high-profile blowups of two hedge funds, Bayou Management and Wood River Capital Management, have raised an important question: What can hedge fund investors do to avoid getting burned by unscrupulous managers? The answer: Quite a bit, as long as you’re willing to spend time or money vetting these investments.<\/p>\n
That’s not as hard as it may sound. As hedge funds have proliferated, so have resources for checking them out. For fees ranging from $1,000 to several thousand dollars, a growing number of hedge fund “sleuths” will conduct background checks on these secretive partnerships and their managers by searching for such red flags as bad credit histories and padded r\u00c3\u0192\u00c2\u00a9sum\u00c3\u0192\u00c2\u00a9s. And thanks to the dissemination of information on the Internet, individual investors can tap into some of the same tools the professionals use. “There’s a lot more information available online now than there was just a few years ago,” says Jeffrey Brenner, principal at Intelysis, a Cherry Hill (N.J.) firm that does a booming business in hedge fund investigations.<\/p>\n