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Fund of Funds Investing: A Roadmap to Portfolio Diversification by Richard S. Bookbinder, Daniel A. Strachman

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Appendix A. Appendix

Note

DISCLAIMER: THIS MATERIAL IS TO BE USED ONLY AS AN ILLUSTRATION AND NOT FOR PREPARATION OF DOCUMENTS; NOR DOES IT IN ANY WAY CONSTITUTE LEGAL OR ANY OTHER FORM OF ADVICE.

Copyright © DASP. All rights reserved.

STANDARD DUE DILIGENCE: (NAME) FUND

General Information

  • (1) Please describe all the strategies you deploy in the (NAME) Fund (e.g., fixed income arb, convertible arb, event arb, long/short equities, etc.). The core tenet of (NAME)'s investing strategy is relative value investing. In general, relative value investing in the (NAME) Fund involves the purchase of undervalued securities and hedging with fair value or overvalued securities. Regardless of the specific asset class, this is the core of the strategy. Current asset classes involved in the multi-strategy portfolio include Mortgage Arbitrage, Global Fixed Income Arbitrage, Convertible Bond Arbitrage, Event Driven Arbitrage, and Capital Structure Arbitrage. The asset allocation is dynamic, dependent upon current market conditions and opportunities in specific asset classes. The expectation is that the multi-strategy fund will have an improved risk/return profile, since the fund has a wide investment universe and a large set of markets to explore for hedging purposes.

  • (2) Do you operate in all markets globally or do you limit yourself to specific markets? Globally.

  • (3) What do you consider the revenue prospects to be for the strategies you exploit? We anticipate a Libor + xxx basis points to LIBOR + xxx ...

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