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CHAPTER 12

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Due Diligence

Allocating capital to a fund manager is a complex decision for an investor. The cost of a wrong decision is quite high. Unlike a physical product, which comes with an actual product to test and review with performance guarantees, professional services affords no such assurance and LPs rely on due diligence prior to making an investment decision.

Allocating capital holds risks for the LP. While the GP must abide by certain expectations and boundaries, they manage investor capital without any real supervision from LPs. Alternative ...

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