Due to imperfect transparency and costly auditing, trust is an essentialcomponent of financial intermediation. In this paper we study acomprehensive sample of due diligence reports from a major hedge funddue diligence firm. A routine feature of due diligence is an assessmentof integrity. We find...

The rapid growth of hedge funds in recent years has been accompanied by cases of severe failure. Since the aftermath of Long Term Capital Management (LTCM), investors recognize that hedge funds may provide high expected returns but they might be exposed to a huge downside risk that is not easily...

The rapid growth of hedge funds in recent years has been accompanied by cases of severe failure. Since the aftermath of Long Term Capital Management (LTCM), investors recognize that hedge funds may provide high expected returns but they might be exposed to a huge downside risk that is not easily...