Due Diligence Gets Its Due

Hedge funds, investment firms and wealth management firms are on a hiring spree-scouring for due diligence analysts. But no matter the firm, fund, and products, the job's basically the same. The job title may vary, as with many financial posts. But in a nutshell, it's about mitigating operational risk. Hedge funds, in particular, seem to be keenly interested in senior-level due diligence specialists and analysts.

A cooperative spirit is certainly a plus, as higher level due diligence pros at hedge funds work closely with the CFO and COO in place, as well as other money making principals, handling manager and investment research. Strong industry connections are also a part of it, as analysts need a deep knowledge of the alternative investment space. The post requires someone with writing abilities and strong communication skills, in addition to the obvious relevant industry knowledge.

It's not a surprise that hedge funds are getting cautious, given the renewed interest in such things as asset-backed securities and other more controversial investment vehicles.

Expect broker-dealers to renew focus on due diligence, as well. FINRA's stepped up actions on failed private placements is certainly the cause. The recent sanctions by FINRA are putting the industry on alert, with a concern that there's more supervision down the road.