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ISO 9001 de-risks operational side of funds of hedge funds

ISO 9001 is increasingly providing funds of hedge funds with the framework to scale their business, according to H.D. Management.

H.D. Management has been providing change management and risk evaluation services to the financial sector since its incorporation in 1995. CEO Hugh Craigie Halkett said: "The days of hiring a high-profile investment manager supported by a 'fag-packet' investment infrastructure are gone."

He added: "If HFoFs are serious about de-risking the operational side of their business or are looking to attract institutional business, then ISO 9001 will provide them with the sort of credible infrastructure that they need to deliver on their promises."

With a global universe of over 9000 funds, the hedge fund market is experiencing a growth explosion like never before. Established funds of hedge funds (FoHFs), with an ever-expanding support infrastructure, are working hard to evaluate this vast universe.  Increasingly the more successful players are coming to recognise that ISO 9001 provides them with the necessary framework to scale up their business in a controlled fashion, taking advantage of this huge market, whilst de-risking the operational side of the business in the process.

The internal and external 3rd party process auditing mechanism provided by ISO 9001 ensures early identification of both existing and potential operational risks as well as providing the tool-kit for resolving them.  This provides confidence to clients that ISO 9001 certified FoHFs have rigorous and repeatable investment and support processes that are subject to continuous monitoring.

Many mainstream asset management companies are launching FoHFs to take advantage of the burgeoning hedge fund market.  Whilst many may have attracted the necessary investment talent for their start-ups, they lack the necessary operational infrastructure that ISO 9001 provides.

H.D. Management stated: "FoHFs looking to attract institutional business in addition to wealthy private clients, will find that institutions are attracted to FoHFs with credible rigorous investment infrastructures."

Background Note:

  • ISO 9001:2000 is a process based continuous improvement model, which is subject to 3rd party independent assessment.  It focuses on risk identification and improved productivity within a business.  A company receives ISO 9001:2000 certification upon verification by an independent auditor that it has complied with the standard.

  • ISO 9001:2000 is now the only ISO 9000 certification standard, revised from the 1994 versions in 2000.  Standards are reviewed at least every five years to determine whether they should be confirmed, revised or withdrawn.
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