Frequently Asked Questions

Can you provide an example of the exchange process?

Suppose that member A would like to have due diligence (DD) performed on funds #1, #3, and #5. Member A would click on the "Select" button next to the correct fund. (In this case, let's assume that the members are willing to pay half price.) Member B would like to have DD on fund #3 and clicks on the same "Select" button. We now have a "Match." Members A and B will be contacted by a senior member of our team confirming that there is a Match and for final authorization to begin the process. With authorization, HFDDX will begin the DD process and provide a report when it is completed. Because there is a Match, each member will be charged only half of the standard fee.

If I select price, will I pay price even if there are already two other bidders?

No. You will always pay the lowest price. In this case, if there were three members bidding on the same fund, each would pay only 1/3, regardless of the price they selected.

Suppose a third member wants a report already in progress. How much will I pay?

You will always pay the lowest price until the report has been completed and delivered. In this case, each member would pay 1/3, regardless of the price they selected or agreed to.

How do I get the $1,000 discount?

Be the first to make a bid on a fund and receive a $1,000 discount. For example, if you bid half price and you are the first bidder, your price will be $8,450. The second bidder will pay the standard half price rate of $9,450.

What if I agreed to pay full price and another member bids. How much will I pay?

Again, you will always pay the lower price. In this case, each member would pay half regardless if they agreed to pay full price or half price.

There are thousands of funds. Will I be waiting a long time?

Many have large needs and they realize that proper due diligence can take significant time to do properly. Because of the large need and the time involved, the order in which the funds are examined may be less important than the ability to save money on the work. In addition, as more members join HFDDX, the chances increase that a Match will be found. Of course, if you cannot wait, check the "Select" button under "Full Price" and we will start the due diligence process as soon as the team is free. Therefore, you may pay the regular price if no Match is available immediately; but there is a good chance that you could pay half or less by waiting.

If I select funds in the HFDDX table, am I required to pay?

No. Selecting funds (bidding) is only an indication of interest. We wait until there is a Match with another member, and before we start the process, we contact you for approval. At that time, if you accept, we begin the process. If you decline, we do not start and you owe nothing. Of course, if you select "Full Price", we will contact you as soon as the team is available to begin your report and send you an invoice.

How long does it take to produce a report?

A complete report will be ready in approximately four weeks. Unfortunately, we cannot provide a specific deadline because our work depends on the response time from the manager and several service providers.

Can I request a report to be completed quickly?

We try to honor urgent requests and complete the process in as few as two weeks. If so, there is a 20% surcharge (10% if completed within 3 weeks). However, because our process depends on the manager and several service providers furnishing us with the necessary material or answers, we cannot guarantee that the report will be completed by a specific date.

What if I cannot wait for a Match?

Log on and change your request in the HFDDX table to "Full Price." We will invoice you for the full report fee and begin the process as soon as possible. Of course, we still will contact you to confirm your request prior to beginning our work. Also, if at any time before the report is completed another member makes a bid, the cost will be shared equally and each member's fee will be reduce, even if they agreed to a higher price originally.

When do I pay?

As soon as you give us authorization to create an HFDDX report, we will immediately invoice you. We require payment before the report will be released.

I have a special need that is not part of your process. How is that handled?

If your suggested item would help make our reports better, we will incorporate the suggestion at no charge to you. This is because we are always trying to improve our work product. If it is unique to a particular fund and would not lend itself to altering our standard process, we will estimate the work required and provide you with an estimated cost.

Are travel costs included?

Approximately 50% of all hedge fund managers are located in the New York metropolitan area. There are no travel-related charges for visits with managers within 100 miles of New York City. We provide advance estimates for travel costs outside of the NYC area. We also attempt to minimize travel expenses by grouping international manager visits.

Are any other costs not included?

The basic fee includes background investigation on the management company and three individuals. Additional costs will be incurred if investigations are requested on more than three individuals or if investigations must be conducted outside USA, UK, or Canada. We will seek your authorization prior to proceeding with any investigations that cost extra.

When is a background check considered too old?

We may reuse a background check only if the investigation occurred within 90 days of the confirmation date. Otherwise, we will start the investigation process anew.

When is an HFDDX report too old?

We will resell an already completed report if it is within 90 days of completion at the 1/3 rate (the same fee as if three clients requested the same report). Please contact HFDDX for reports older than 90 days.

Will the Investment Manager get a copy of the report?

No. We will not provide a copy of our report to the Investment Manager. This is done to keep conflicts of interest out of our process. In fact, you are prohibited from sharing our report with the investment manager. HFDDX works for investors. Our findings, opinions, and recommendations, either positive or negative, are for your eyes only.

What types of organizations join HFDDX?

All members will be screened by HFDDX management prior to acceptance. Investors are the core of our membership, but other participants in the alternatives community may also be welcomed. Service providers, for example, have significant due diligence needs.

I am potentially interested in working with your group for a larger number of due diligence reports over a longer period. Do you offer special incentives for larger clients?

Yes. We offer special incentives for clients with large needs. Please contact Robert Krause at robert.krause@hfddx.com or 844-HFDDX-COM (844-433-3926) to start a dialogue how HFDDX can best serve your needs.

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