HedgeWorld is gearing up to officially unveil its distribution platform and global online hedge fund marketplace, FundSelect. Come May 15, HedgeWorld will begin accepting applications from U.S. investors, hedge funds based in the states, and investment advisors who want to be considered for membership privileges.
Modeled on Charles Schwab’s OneSource platform that offers access to a universe of mutual funds, FundSelect will provide advisors with access to a trading platform and offer comprehensive due diligence reports on hedge fund managers.
“We wanted to build a distribution platform that’s designed to raise assets for hedge fund managers by bringing a wide variety of products to investors in one place because the industry is so fragmented,” says Jeff Joseph, managing director of HedgeWorld. (HedgeWorld provides hedge fund information and news to Investment Advisor in print and on the Web.)
“Third-party Web sites can disseminate data on private placements whether they be private equity or hedge funds, and there are dozens of sites that disseminate data, but they only allow an investor or advisor to go so far; you can identify a product you are attracted to based on performance, but that’s it,” Joseph says. “We go beyond that [with FundSelect] by allowing you to buy third-party investigative due-diligence reports on the managers so you can investigate their education, employment background, regulatory history, civil and criminal judgments, and tax liens. The third-party investigative reports do thorough due diligence intended to mitigate against the structural risk that is part of a private placement.”
Comparable due diligence reports sell for anywhere from $5,000 to $8,000, Joseph says. But HedgeWorld’s reports, performed by an outside firm, will be available for the bargain price of $2,250, depending on the depth of research required, he says.