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    Merlin Securities presented 12 best practices, known as the Big 12, for hedge funds at the SALT conference. The Big 12 practices include having written compliance and trading policies, multiple levels of authority over cash movements, a consistent valuation policy by asset class, strong technology infrastructure, understanding why different service providers are used, a clear risk management methodology, the ability to prove best execution, high-quality legal and audit representation, sustainable third-party administration, dedicated operations managers and compliance officers, significant investment of the principal's own money in the fund, and daily reconciliation of positions and cash. The paper was presented by Ron Suber, senior partner at Merlin Securities.

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    Merlin Securities presented 12 best practices, known as the Big 12, for hedge funds at the SALT conference. The Big 12 practices include having written compliance and trading policies, multiple levels of authority over cash movements, a consistent valuation policy by asset class, strong technology infrastructure, understanding why different service providers are used, a clear risk management methodology, the ability to prove best execution, high-quality legal and audit representation, sustainable third-party administration, dedicated operations managers and compliance officers, significant investment of the principal's own money in the fund, and daily reconciliation of positions and cash. The paper was presented by Ron Suber, senior partner at Merlin Securities.

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    34 views1 page

    Big 12 Hedge Fund Best Practices - Final

    Uploaded by

    jennifer7742
    Merlin Securities presented 12 best practices, known as the Big 12, for hedge funds at the SALT conference. The Big 12 practices include having written compliance and trading policies, multiple levels of authority over cash movements, a consistent valuation policy by asset class, strong technology infrastructure, understanding why different service providers are used, a clear risk management methodology, the ability to prove best execution, high-quality legal and audit representation, sustainable third-party administration, dedicated operations managers and compliance officers, significant investment of the principal's own money in the fund, and daily reconciliation of positions and cash. The paper was presented by Ron Suber, senior partner at Merlin Securities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    The Big 12: Merlins Best Practices For Hedge Funds

    Note: Ron Suber, senior partner at Merlin Securities, presented the following paper at the second annual
    SkyBridge Alternatives (SALT) Conference on Wednesday, May 19, 2010.

    Managers who meet these Big 12 Best Practices and generate Alpha can seize the growth
    opportunities in the marketplace.

    1. Written compliance and employee trading policies with periodic attestation

    2. Multiple levels of authority on cash movements with a minimum of two people


    controlling input, release and approvals

    3. Written and consistent valuation policy by asset class

    4. Sound technology and infrastructure with reliable back-up, disaster recovery and
    business continuity plan

    5. Open architecture to handle multiple prime brokers, multiple custodians and


    managed accounts; understand why these firms are used and the alpha they
    generate

    6. Clear risk management methodology

    7. Ability to prove best execution

    8. High-quality audit, tax and legal representation

    9. Sustainable third party administration with SAS 70 Type II

    10.Dedicated operations manager, COO, CFO and CCO

    11.Significant principals money in the fund

    12.Daily position and cash reconciliation

    Ron Suber is senior partner and head of global sales and marketing for Merlin Securities, a leading prime
    brokerage services and technology provider for hedge funds and managed account platforms.

    www.merlinsecurities.com

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