Hedge Fund Managers Are Advised to Build Robust Infrastructure

As investors conduct deeper due diligence into infrastructure – such as compliance policies and procedures, technology systems and cybersecurity protections – hedge fund managers must ensure that their programs and systems are robust and able to withstand scrutiny. See “Legal, Operational and Risk Considerations for Institutional Investors When Performing Due Diligence on Hedge Fund Service Providers” (Jul. 8, 2010). Managers may choose to supplement their in-house infrastructure by outsourcing and delegating to third-party service providers, while monitoring those providers to ensure quality. At a recent seminar hosted by Backstop Solutions Group and ACA Compliance Group, panelists discussed the integration of technology and compliance, outsourcing of business functions to third parties, due diligence of service providers and investor scrutiny of hedge fund managers. This article highlights the salient points raised during the program. For additional insight from Backstop, see “Essential Tools for Hedge Fund Managers to Combat Escalating Cyber Threats” (Feb. 4, 2016). For coverage of a recent program jointly offered by the HFLR and ACA, see “Recommended Actions for Hedge Fund Managers in Light of SEC Enforcement Trends” (Oct. 22, 2015).

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