Comments on: Despite operational risk reporting standards, chasm remains between hedge fund investors and managers http://allaboutalpha.com/blog/2009/01/25/despite-operational-risk-reporting-standards-chasm-remains-between-hedge-fund-investors-and-managers/ Hedge funds, portable alpha, 130/30 and alpha-centric investing Fri, 19 Mar 2010 07:52:26 +0000 http://wordpress.org/?v=abc hourly 1 By: David Merkel http://allaboutalpha.com/blog/2009/01/25/despite-operational-risk-reporting-standards-chasm-remains-between-hedge-fund-investors-and-managers/comment-page-1/#comment-150826 David Merkel Mon, 26 Jan 2009 21:09:58 +0000 http://allaboutalpha.com/blog/?p=4129#comment-150826 This is just a guess, but here goes: Institutional investors are used to the operational transparency/reliability of regulated products that are simpler. They are not used to digging into the nuts and bolts of operations -- it is boring, as you point out, and the payoffs are uncertain. Loss prevention is always duller than hearing a good story about the advantages of an investment group's past successes and durable advantages. But with anything unregulated and unusual, this sory of due diligence is critical. This is just a guess, but here goes: Institutional investors are used to the operational transparency/reliability of regulated products that are simpler. They are not used to digging into the nuts and bolts of operations — it is boring, as you point out, and the payoffs are uncertain. Loss prevention is always duller than hearing a good story about the advantages of an investment group’s past successes and durable advantages.

But with anything unregulated and unusual, this sory of due diligence is critical.

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