Private Equity Operational Due Diligence, + Website: Tools to Evaluate Liquidity, Valuation, and Documentation: 731 (Wiley Finance)
Author(s): Jason A. Scharfman (Author)
Publisher: Wiley
Publication Date: 19 April 2012
Edition: 1st
Language: English
Print length: 400 pages
ISBN-10: 111811390X
ISBN-13: 9781118113905
Book Description
A step-by-step guide to develop a flexible comprehensive operational due diligence program for private equity and real estate funds
Addressing the unique aspects and challenges associated with performing operational due diligence review of both private equity and real estate asset classes, this essential guide provides readers with the tools to develop a flexible comprehensive operational due diligence program for private equity and real estate. It includes techniques for analyzing fund legal documents and financial statements, as well as methods for evaluating operational risks concerning valuation methodologies, pricing documentation and illiquidity concerns.
Covers topics including fund legal documents and financial statement analysis techniques
Includes case studies in operational fraud
Companion website includes sample checklists, templates, spreadsheets, and links to laws and regulations referenced in the book
Equips investors with the tools to evaluate liquidity, valuation, and documentation
Also by Jason Scharfman: Hedge Fund Operational Due Diligence: Understanding the Risks
Filled with case studies, this book is required reading for private equity and real estate investors, as well as fund managers and service providers, for performing due diligence on the noninvestment risks associated with private equity and real estate funds.
Editorial Reviews
From the Inside Flap
Though not as prevalent as hedge funds, lucrative private equity and real estate funds handle billions of dollars versus hedge funds’ millions. Because of the vast amount of money invested in these funds, it is imperative that investors perform operational due diligence. Written to persuade Limited Partners once and for all of the benefits of performing and maintaining a robust operational due diligence program, Private Equity Operational Due Diligence arms you with the tools to develop detailed, agile, comprehensive, and ongoing operational due diligence reviews.
Addressing the unique aspects and challenges associated with private funds, author Jason Scharfman shares his decades of experience performing due diligence on the non-investment (i.e., operational or business) risks associated with private equity and real estate funds. Beginning with a brief history of operational risk coupled with the unique aspects of operational due diligence on private equity funds, Private Equity Operational Due Diligence analyzes the approaches to valuation, legal, and financial statement risks. User-friendly flag icons throughout the text highlight key operational risk areas and deficiencies that have historically tended to signal larger problems.
In this step-by-step guide, you’ll discover:
Operational risk compared to operational due diligence
Understanding the goals of the operational due diligence process
Designing an operational due diligence program for private equity
Key risk consideration areas
Cash management and controls
Business continuity and disaster recovery
Valuation committee review scope
Operational due diligence specialists versus generalists
Trends in indemnification and exculpation clauses
Fraud considerations: mortgage fraud and straw man borrowers
Evolution of Minimum Operational Risk Regime (MORR)
Ongoing fund monitoring techniques
Private equity fund advisory boards
Different types of advisory boards: Limited Partners versus Pure Advisors
Case studies and scenarios
Trends and future developments
Use of third-party administrators
Impact of Dodd-Frank on operational due diligence
A companion website includes sample checklists and templates to assist with the techniques outlined in the book, including spreadsheets for financial statement analysis and legal document analysis, as well as links to various laws and regulations.
It’s time to give operational due diligence its due respect with Private Equity Operational Due Diligence.
From the Back Cover
Though not as prevalent as hedge funds, lucrative private equity and real estate funds handle billions of dollars versus hedge funds’ millions. Because of the vast amount of money invested in these funds, it is imperative that investors perform operational due diligence. Written to persuade Limited Partners once and for all of the benefits of performing and maintaining a robust operational due diligence program, Private Equity Operational Due Diligence arms you with the tools to develop detailed, agile, comprehensive, and ongoing operational due diligence reviews.
Addressing the unique aspects and challenges associated with private funds, author Jason Scharfman shares his decades of experience performing due diligence on the non-investment (i.e., operational or business) risks associated with private equity and real estate funds. Beginning with a brief history of operational risk coupled with the unique aspects of operational due diligence on private equity funds, Private Equity Operational Due Diligence analyzes the approaches to valuation, legal, and financial statement risks. User-friendly flag icons throughout the text highlight key operational risk areas and deficiencies that have historically tended to signal larger problems.
In this step-by-step guide, you’ll discover:
Operational risk compared to operational due diligence
Understanding the goals of the operational due diligence process
Designing an operational due diligence program for private equity
Key risk consideration areas
Cash management and controls
Business continuity and disaster recovery
Valuation committee review scope
Operational due diligence specialists versus generalists
Trends in indemnification and exculpation clauses
Fraud considerations: mortgage fraud and straw man borrowers
Evolution of Minimum Operational Risk Regime (MORR)
Ongoing fund monitoring techniques
Private equity fund advisory boards
Different types of advisory boards: Limited Partners versus Pure Advisors
Case studies and scenarios
Trends and future developments
Use of third-party administrators
Impact of Dodd-Frank on operational due diligence
A companion website includes sample checklists and templates to assist with the techniques outlined in the book, including spreadsheets for financial statement analysis and legal document analysis, as well as links to various laws and regulations.
It’s time to give operational due diligence its due respect with Private Equity Operational Due Diligence.
About the Author
JASON A. SCHARFMAN is a Managing Partner at Corgentum Consulting. He performs operational due diligence reviews of hedge funds, private equity, and real estate funds on behalf of institutional investors, pensions, high net worth individuals, and ERISA plans. Prior to forming Corgentum, he was the Director of Operational Risk at Graystone Research (Morgan Stanley). As Director, he was responsible for managing global operational risk assessment for all U.S., Asian, and European funds. His articles have appeared in Pension & Investments and FINAlternatives.com. He also teaches a course at New York University, has consulted with the U.S. House Judiciary Committee on the subject of hedge fund and private equity regulation, and provided training to financial regulators on the subject of hedge fund and private equity due diligence.
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