Overview

This is Module 10 of the Henley Executive Hedge Fund Program (HEHFP), which addresses internal functions covers the Operational Risk Management infrastructure (ORM), and also Operational Due Diligence (ODD). It explains what can go wrong in a fund and the sources of operational risk and provides views of operational risk through both the hedge fund manager’s lens and also the investor’s lens. The module also covers practical steps that can be taken to identify, measure and monitor such risks, and control them.

This module is a 3-hour (approx. study time) course and is eligible for 1.5 SFC CPT/PWMA OPT hours.

Check out the other modules in the Program:

• Module 1: Overview of the Hedge Funds Industry
• Module 2: Structuring & Setup
• Module 3: Capital Raising & Investor Relations
• Module 4: Portfolio Management
• Module 5: Portfolio Risk Management
• Module 6: Markets and Trading
• Module 7: Prime Brokerage Services
• Module 8: Business Management & Fund Administration
• Module 9: Operations and Technology
• Module 11: Legal
• Module 12: Ethics (2023)
• Module 13: Compliance
• Module 14: Fund Governance
• Module 15: Tax, Audit & Accounting
• Module 16: Human Resources
• Module 17: Pitchbook Formation

Objective

By the end of this module, you will be able to:
- Explain the operational risk inherent in running a fund and how to manage it
- Describe what is involved in a due diligence review
- State practical steps can be taken to identify, measure, monitor and control the risks

Content

Part 1 - Pre-reading materials
(i) Greenwich Roundtable - Best Practices in Alternative Investing
(ii) The Hedge Fund Implode-o-Meter
(iii) The 7 Habits of Highly Suspicious Hedge Funds
(iv) Administrator Transparency Reporting

Part 2 - Presentation Slides of the eCourse

Part 3 - Operational Risk Management & Operational Due Diligence eCourse*
(i) Section 1: Risks in Hedge Funds
(ii) Section 2: Operational Risk Management at Hedge Funds
(iii) Section 3: Operational Due Diligence
(iv) Section 4: Concluding Remarks

Part 4 - Quiz*
The quiz consists of 15 questions where learners have 3 attempts to achieve at least 80% with correct answers as a pass.

Part 5 - Post-reading materials
(i) A Guide to Hedge Fund Business & ODD 
(ii) The Operational Due Diligence process
(iii) SBAI Cyber Security
(iv) Cash Handling and Cyber-security
(v) HFMConnect Roundtable
(vi) Guide to Closing Down a Fund
(vii) The Investment Management Due Diligence Association (IMDDA)

* mandatory parts to complete

Who should attend

(1) Hedge Fund professionals seeking to enhance their knowledge
(2) Individuals looking to start a Hedge Fund
(3) Service providers e.g., Banking, Risk, Compliance and IT professionals, Lawyers, Fund Administrators