Weekly Hedge Fund Disaster Series to Begin

We will be initiating a weekly hedge fund disaster series in the next few days, partly because, with the exception of Long Term Capital Management, we find it is not always easy to track information down on the basics of the fund and its downfall.
I find myself forgetting key elements of these infamous cases.

Often there are a few good articles written on the fund that may eventually be difficult to locate.

It is not my attention with this series to scare people away from hedge fund investment altogether. Frankly, it is important to identify common signposts in these examples and build a detailed due diligence process around it. Diversification obviously is a virtue, but we think it is possible to sidestep some of these meltdowns.

Our bias is to get as much information from a manager before investment as possible, to assess what he or she is doing, what the manager might do in adverse circumstances, and whether the organization and infrastructure behind him or her supports meeting these objectives.

Though much has been written about LTCM, we expect we will discuss that fund early in the series. But some more recent examples (Bayou Group, Beacon Hill) will also be on our list for coverage.