Best Practices for Hedge Funds Part 1

Abstract

In April 2003, a Hedge Fund investor organization undertook the task of developing standards and best practices for hedge fund managers from the perspective of hedge fund investors. Their efforts resulted in a report with suggestions and recommendations on various aspects of portfolio and risk management such as valuation procedures, disclosure and transparency, risk monitoring, lockups and conflicts among others. The report is divided into two parts. This first part covers ethics, management policies, disclosure and transparency, valuation policies and procedures, risk monitoring and marketing and communications. The second part of the report which will be featured in the next issue and covers regulation, compliance and documentation, fees, conflicts of interest and strategy change.