LONDON (Dow Jones)--Protean Investment Risks Monday launched a new product for hedge funds aimed at boosting investor confidence in the wake of a year of dire performance capped by the Madoff scandal which led to an unprecedented outflow of funds from the industry.
Protean Fraud Appraisal Certification, or PFAC, enables hedge funds and other managers to assess their risk to fraud and pass this information on to investors and potential investors, said Protean, which specializes in insurance products to protect investors against hedge fund fraud.
"The certification supports the investment industry's gravitation to higher standards and best practice," said Nathan Sewell, Partner at PFAC.
The spectacular collapse of Bernard L Madoff Investment Securities and the industry's worst year ever highlighted the failure of due diligence across the sector and has triggered a move to a more investor-friendly environment.
PFAC is just the latest product aimed at improving risk management and transparency.
Earlier this year New York and Dublin-based HedgeServ launched a new hedge fund administration process, which provides a platform for hedge funds to manage all portfolio operations from risk through to middle office applications and a general ledger.
U.S. firm, New Jersey-based Investor Analytics, has recently launched a new application, AlphaSimplex Analytics Array, which incorporates changing conditions into its analyses and includes liquidity risk exposures and potential fraud indicators among its reports.
http://online.wsj.com/article/BT-CO-20090601-710101.html
This should be interesting to watch unfold...
JW
