Valuation issues and operational risk in hedge funds
In our recent study on the root causes of hedge fund failures, we identified a number of operational risk factors that together seem to account for approximately half of catastrophic cases. Issues related to valuation - the determination of fair-market value for all of the positions that make up a fund – underlie many of these operational risk factors. Recently, valuation problems have also been much in the news. These headlines suggest that the industry is not yet taking the steps needed to address problems in the valuation process. In fact, we believe that issues related to valuation of portfolios will likely become the next major 'black eye' for the hedge fund industry. Unless certain practices discussed in this paper become more widespread, we believe that hedge funds face a potential crisis of confidence with institutional and high net worth investors. Therefore, we are using this paper to consider the issues related to the valuation of hedge fund portfolios more closely, in particular as they pertain to the issue of managing operational risks associated with hedge fund investments.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 10 (2004)
Issue (Month): ()
|Contact details of provider:|| Postal: 77 Water Street, 10th Floor, New York NY 10005|
Phone: +1 212 284 8600
Web page: http://www.capco.com/
When requesting a correction, please mention this item's handle: RePEc:ris:jofitr:1343. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Shahin Shojai)
If references are entirely missing, you can add them using this form.