Hedge fund accountant responsibility :

1. Preparing the Financial statements of traditional and alternative funds administered

as open ended investment companies(OEIC) and unit trusts
2. Calculation of the NAV distributions for the shareholders/unit holders for the
various classes of shares/units issued by the OEIC/unit trusts.
3. Revaluation of overseas assets, currencies and tax reclaims for the preparation of
the relevant financial statements.
4. Reconciling the position of assets declared by the funds with the balances
available with the custodians.
5. Preparing the working papers with relevant supporting documents to facilitate
audit.

MODULE 1: INTRODUCTION TO HEDGE FUNDS

 Traditional investments and aslternative assets

 Role of hedge funds in an investor's portfolio
 History of the industry
 Size and growth of the Industry
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MODULE 2: HEDGE FUND OPERATIONS

 Governing regulations
 Legal structures
 Documentation
 Outside service providers
 Prime brokerage
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MODULE 3: HEDGE FUND STRATEGIES

 Market directional
 Corporate restructuring
 Convergence trading
 Opportunistic strategies
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MODULE 4: ISSUES FOR HEDGE FUND INVESTORS

 Who can invest in hedge funds

 Due diligence
 Fees
 Portfolio monitoring
 Benchmarks and biases
 Leverage
 Risks for hedge funds
 Fund of funds
 Portfolio construction

Learning :

 Who invests in hedge funds and why?

 Distinguish among the different types and styles of hedge funds
 Understand the prevalent hedge fund strategies and the implications for diversified portfolio
performance

 Hedge fund performance—Do hedge funds outperform mutual funds and other asset classes?
What factors explain hedge funds’ returns? Do hedge fund managers possess skill and, if so,
what are the sources of this skill? Finally, are there any benefits to investing in funds of hedge
funds? The academic literature, in general, has found that hedge funds tend to outperform mutual
funds even after accounting for the higher fees charged by hedge funds. Interestingly, despite the
fact that the average hedge fund generates positive alpha, the evidence on performance
persistence is mixed. Researchers have also uncovered some potential sources of hedge fund
managers’ skill. Specifically, managers have been shown to possess superior security selection
ability and time their exposures to certain risk factors (such as market volatility and liquidity risk).
Finally, although the consensus is that funds of hedge funds do not perform well enough to justify
their additional fees, studies have found that funds of funds help investors access funds closed to
new investment and also fire managers who underperform.

 Hedge fund characteristics and performance—Are there any fund or managerial

characteristics that are associated with superior performance? Do compensation incentives
impact fund performance? As discussed above, research has uncovered investment flexibility and
incentives to be the main sources of hedge funds’ outperformance relative to mutual funds. Funds
with higher-powered compensation incentives and funds with more flexibility have been shown to
outperform other funds. Younger funds, smaller funds, managers that attended better
undergraduate institutions, and funds with more distinct strategies have also been shown to
outperform their peers.
 Hedge fund risk taking and risk management—Does the compensation structure of hedge
funds induce greater risk taking? How much operational risk and/or agency problems do hedge
fund investors face? Are there ways to predict fraud based on hedge funds’ self-reported returns?
How does the use of prime brokers and leverage impact the funding liquidity risk in hedge funds?
Are hedge fund investors exposed to liquidity and tail risk? What are the risk management
practices of the hedge fund industry and are they effective? Academics have largely concluded
that, although hedge funds’ compensation structures are convex, other factors such as managers’
horizons and career concerns mitigate excess risk-taking. Researchers have also uncovered
certain patterns in funds’ returns that are correlated with fraud and misreporting.

 The role of hedge funds in the financial system—Did hedge funds cause the 2008 financial
crisis? Do hedge funds propagate systemic risk? Do hedge funds help impound information into
stock prices? Does hedge funds’ ability to invest in illiquid assets improve market liquidity? What
impacts do activist hedge funds have on corporate policies and corporate governance? In short, a
few studies provide evidence that hedge funds caused the financial crisis. Although some studies
suggest that hedge funds can manipulate stock prices, the academic literature generally finds that
hedge funds help financial markets by providing liquidity and improving price efficiency.
Moreover, the literature overwhelmingly suggests that activist hedge funds do not cause
corporations to become myopic or employ value-destroying policies.

 Hedge fund database biases—What are the challenges associated with evaluating hedge fund
performance given that our sole source of return data is from commercial databases that rely on
voluntary reporting by hedge funds? How accurate is such data—do hedge funds revise or delay
their reporting? Are the databases free of survivorship bias? Do hedge funds strategically report
to these databases after periods of superior performance? The literature has documented
significant issues with these databases; survivorship and selection biases appear to make a
significant difference on estimation of hedge funds’ performance.