Due diligence is an activity with diminishing marginal returns which consumes the time of the fund's investment professions; therefore a potential investor is wise to limit the inquiry to a quantitative analysis which tends to be objective and fact-based.

Hedge fund are still largely unregulated and, unfortunately, anyone who feels that have been defrauded by a hedge fund cannot realistically report to a government agency as no single agency has jurisdiction.

Because due diligence is focused on the firm's risk management process, fund operating environment, business model and fraud risk, the investment strategy (e.g., equities, fixed-income, distressed) is largely irrelevant.