How much due diligence would you perform on a fund before giving them your $$$?

[Cutten]

Quote from Jumpshot:

A very thorough due diligence would involve spending probably at least 10-20 thousand utilizing different third parties to verify the credibility of the person you are giving money to.

Many persons want to save money, therefore, they will do the due diligence themselves.

How is it "saving money" to endanger $5 million for the sake of $10-20 thousand? That's like buying a $5 million house with no home insurance.

 

[IMF]

Quote from vhehn:

I wouldnt give my 5 million to anybody. no single fund should get all of your money. diversify.

eheheheh that is exactly what funds do, they disperse and invest in each other

that is why when all goes to hell, most of them go to hell

 

[increasenow]

they aint got no website...I aint a lookin

 

[sjfan]

And now we know why you don't have $500MM...

Quote from Pekelo:

Is this a trick question? By the way answer depends on how much money I have. If I have 500 million, I can throw around 5 million without due diligence....

 

[Free Thinker]

Quote from IMF:

eheheheh that is exactly what funds do, they disperse and invest in each other

that is why when all goes to hell, most of them go to hell

yea but they wont all be ponzi schemes that could go to zero.

 

[MGB]

Quote from Cutten:

At a minimum, a full background check and investigation into everyone who works at the fund, their lifestyle, spending habits, public records etc. Full check on the auditor. I'd also try to reverse-engineer their strategy and see if their returns are consistent with the market conditions e.g. if a short-selling fund is up big during a bull market I would be very suspicious and going over everything with a fine-toothed comb.

There are companies that specialize in due diligence of hedge funds, alternative investments, etc.

There's a cottage industry around due diligence.