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Capital Market Risk Advisors

Due Diligence

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A Holistic Approach

CMRA leverages its expertise in "Best Practices" when performing due diligence. To inform our approach, we also use the knowledge gained from our litigation support and investigations experience as to what has "gone wrong".

We have extensive experience performing due diligence on hedge funds and funds of funds as well as traditional asset managers. We have also performed M&A related due diligence for both buy side and sell side firms.

Ms. Rahl is the author of Hedge Fund Transparency: Unraveling the Complex and Controversial Debate published in March 2003 by Risk Books, which addresses risk due diligence by strategy.

Due diligence is about more than checking boxes and needs to include risk due diligence as well as operational due diligence in addition to strategy and other basic reviews

CMRA has:

  1. Taught institutional investors how to do proper risk due diligence

  2. Done due diligence on behalf of institutional investors

  3. Prepared hedge funds to be on the receiving end of effective risk due diligence

  4. Been both consulting and testifying experts in matters related to poor due diligence

  5. Assisted AIMA in the creation of their original DDQs

  6. Worked with a group of large institutional investors to create “Risk Principles for Asset Managers”

Select Assignments in Best Practice

  • Review of risk management and risk governance for a large asset manager

  • Advised Mutual Fund Directors Forum on "Risk Principles for Fund Directors"

  • Expert witness on operational "Best Practices" for CDS

  • Evaluated market risk management of structured finance business for large European bank

  • CMRA assisted the Mutual Fund Directors Forum in the creation of "Risk Principles for Fund Directors"

  • Conducted Risk Governance Survey of 140 financial institutions

  • Advised the Buy-Side Risk Managers in the creation of "Risk Principles for Asset Managers", published February 2008.

  • Co-chaired the IAFE's Investor Risk Committees Best Practices group

  • Conducted a Fund of Funds Best Practice review for The Alternative Investment Management Association (AIMA)

  • Conducted a multi-client study on buy-side risk management.

  • Benchmarked the practices of hedge funds, money managers, fund of funds, investment banks, commercial banks, derivatives companies and institutional investors

  • Served as Technical Advisors and Coordinators to the Risk Standards Working Group in the development and release of the Risk Standards for Institutional Investment Managers and Institutional Investors

  • Conducted an Economic Capital survey of 40 financial institutions.

  • CMRA has written expert reports and testified on best practices in derivatives, repos, MBS and governance

Relevant Publications

Madoff and the Lessons Learned for Financial Intermediaries - CMRA Risk Insights

Due diligence - Leslie Rahl - March 2004

 
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